SID Companhia Siderurgica Nacional

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Table of Contents

 

Company Information
Capital Breakdown	1
Parent Company Financial Statements
Balance Sheet – Assets	2
Balance Sheet – Liabilities	3
Statement of Income	4
Statement of Comprehensive Income	5
Statement of Cash Flows	6
Statement of Changes in Shareholders’ Equity
01/01/2024 to 03/31/2024	7
01/01/2023 to 03/31/2023	8
Statement of Value Added	9
Consolidated Financial Statements
Balance Sheet – Assets	10
Balance Sheet - Liabilities	11
Statement of Income	12
Statement of Comprehensive Income	13
Statement of Cash Flows	14
Statement of Changes in Shareholders’ Equity
01/01/2024 to 03/31/2024	15
01/01/2023 to 03/31/2023	16
Statement of Value Added	17
Notes to the financial information	18
Reports and Statements
Unqualified Independent Auditors’ Review Report	63
Officers Statement on the Financial Statements	65
Officers Statement on Auditor’s Report	66

 

 

 

Company Information / Capital Breakdown

 

Number of Shares (Units)	Current Period 3/31/2024
Paid-in Capital
Common	1,326,093,947
Preferred	0
Total	1,326,093,947
Treasury Shares
Common	0
Preferred	0
Total	0

 

 

 

 

 

 

Parent Company Financial Statements / Balance Sheet - Assets
(R$ thousand)

 

 

 

Parent Company Financial Statements / Balance Sheet – Liabilities
(R$ thousand)

 

 

 

 

 

 

Parent Company Financial Statements / Statement of Income
(R$ thousand)

 

 

 

 

Parent Company Financial Statements / Statement of Comprehensive Income

(R$ thousand)

 

 

 

Parent Company Financial Statements / Statements of Cash Flows – Indirect Method

(R$ thousand)

 

 

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2024 to 03/31/2024
(R$ thousand)

 

  

 

 

 

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2023 to 03/31/2023
(R$ thousand)

 

 

 

Parent Company Financial Statements / Statement of Value Added

(R$ thousand)

 

 

 

Consolidated Financial Statements / Balance Sheet - Assets
(R$ thousand)

 

 

 

 

 

 

Consolidated Financial Statements / Balance Sheet – Liabilities
(R$ thousand)

 

 

 

 

Consolidated Financial Statements / Statement of Comprehensive Income

(R$ thousand)

 

 

Consolidated Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)

 

 

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2024 to 03/31/2024
(R$ thousand)

 

 

 

 

 

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2023 to 03/31/2023
(R$ thousand)

 

 

 

Consolidated Financial Statements / Statements of Value Added

(R$ thousand)

 

 

 

 

EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS
(In thousands of reais, unless otherwise noted)

 

1.

DESCRIPTION OF BUSINESS

 

Companhia Siderúrgica Nacional (“CSN”, also referred to as “Company” or “Parent company”), is a publicly held company incorporated on April 9, 1941, under the laws of the Federative Republic of Brazil (Companhia Siderúrgica Nacional, its subsidiaries, joint ventures, joint operations and associates are collectively referred to herein as the "Group”). The Company’s registered office is located in São Paulo, SP, Brazil.

 

CSN is listed on the São Paulo Stock Exchange (B3 S.A. - Brasil, Bolsa, Balcão) and on the New York Stock Exchange (“NYSE”), reporting its information to the Brazilian Securities and Exchange Commission (“CVM”) and to the U.S. Securities and Exchange Commission (“SEC”).

 

The Group's main operating activities are divided into five 5 segments as follows:

 

·

Steel:

 

The Company’s main industrial facility is the Presidente Vargas Steelworks (“UPV”), located in the city of Volta Redonda, State of Rio de Janeiro. This segment consolidates all operations related to the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel. In addition to the facilities in Brazil, CSN has commercial operations in the United States and operations in Portugal and Germany in order to gain markets and provide excellent services to final consumers. Its steel is used in home appliances, civil construction, package and automobile industries.

 

·

Mining:

 

The production of iron ore is developed in the cities of Congonhas, Belo Vale and Ouro Preto, State of Minas Gerais, by its subsidiary CSN Mineração S.A. (“CSN Mineração”). The Company’s mining activities also include tin exploration in the state of Rondônia by CSN's subsidiary Estanho de Rondônia S.A. (“ERSA”), to supply the needs of the UPV. The surplus of this raw material is sold to subsidiaries and third parties.

 

Iron ore is sold basically in the international market, especially in Europe and Asia. The prices charged in these markets are historically cyclical and subject to significant fluctuations over short periods of time, driven by several factors related to global demand, strategies adopted by the major steel producers, and the foreign exchange rate. All these factors are beyond the Company’s control. The ore is transported by rail to the Terminal de Carvão e Minérios from the Itaguaí Port (“TECAR”), a solid bulk terminal, one of the four terminals that comprise the Itaguai Port, located in the State of Rio de Janeiro and from TECAR to customers around the world. The imports of coal and coke are also carried out through this terminal by provision of services by CSN Mineração to CSN.

 

As a pioneer in the use of technologies that result in the possibility of stacking the tailings generated in the iron ore production process, the Company, since January 2020, has a complete structure for tailings filtration, allowing the dry stacking of the material. The tailings are disposed of in geotechnically controlled piles in areas exclusively intended for stacking, avoiding the use of dams for this purpose.

 

As a consequence of these measures, decommissioning of dams is the natural path for processing filtered tailings. All of our mining dams are positively certified and comply with the environmental legislation in force.

 

·

Cements:

 

CSN entered the cement market driven by the synergy between this activity and its existing businesses. The cement production unit located next to the UPV facilities, in Volta Redonda/RJ, produces CP-III type cement using slag produced by UPV's own blast furnaces. There is also the exploration of limestone and dolomite at the Arcos/MG unit to meet the needs of the steel industry and the cement factory, as well as the production of clinker at the same unit.

 

On August 31, 2021, the subsidiary CSN Cimentos S.A. (“CSN Cimentos”) concluded the acquisition of control of Elizabeth Cimentos S.A. and Elizabeth Mineração Ltda., operating in the Northeast region, especially in Paraíba and Pernambuco. On May 1, 2022, Elizabeth Mineração was merged into CSN Cimentos.

On September 9, 2021, CSN Cimentos entered into the Agreement for the Sale and Purchase of the Shares in LafargeHolcim (Brasil) S.A., for the acquisition of 100% of the shares issued by LafargeHolcim (Brasil) S.A. (“LafargeHolcim”). On September 6, 2022, the acquisition of all shares issued by LafargeHolcim S.A. was completed, with the corporate name of LafargeHolcim being changed to "CSN Cimentos Brasil S.A.", which became controlled by CSN Cimentos. The Company's main activities are: production, industry and general trade of cement, lime, mortar, minerals and metals in general and complementary products for civil construction, in natura with industrial plants, warehouses and branches across a large part of the national territory.

 

On August 31, 2023, the Extraordinary General Meeting approved the incorporation of CSN Cimentos by CSN Cimentos Brasil with the consequent transfer of all assets, assets (movable and immovable), rights and obligations, in accordance with the terms of the “Protocol and Justification of the Incorporation of CSN Cimentos S.A. by CSN Cimentos Brasil S.A.”. Thus, CSN Cimentos was extinguished, all its shares were canceled and, in replacement, its shareholders received shares in CSN Cimentos Brasil. All activities carried out by CSN Cimentos are now carried out by CSN Cimentos Brasil. The Valuation Report of CSN Cimentos' equity was prepared on June 30, 2023, being the basis for defining a capital increase in CSN Cimentos Brasil in the amount of R$2,383,276.

 

·

Logistics:

 

Railroads:

 

CSN has interests in three railroad companies: MRS Logística S.A. (“MRS”), which manages the former Southeast Railway System of Rede Ferroviária Federal S.A. (“RFFSA”), Transnordestina Logística S.A. (“TLSA”) and FTL - Ferrovia Transnordestina Logística S.A. (“FTL”), which holds the concession to operate the former Northeast Railway System of RFFSA, in the States of Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas - stretches from São Luís to Altos, Altos to Fortaleza, Fortaleza to Sousa, Sousa to Recife/Jorge Lins, Recife/Jorge Lins to Salgueiro, Jorge Lins to Propriá, Paula Cavalcante to Cabedelo, Itabaiana to Macau (Mesh I) and TLSA is responsible for the stretches from Eliseu Martins-Trindade, Trindade-Salgueiro, Salgueiro-Missão Velha and Missão Velha-Pecém (Mesh II), under construction.

 

Ports:

 

The Company operates in the State of Rio de Janeiro, by means of its subsidiary Sepetiba Tecon S.A., the Container Terminal (“TECON”) and by means of its subsidiary CSN Mineração, the TECAR, both located at the Itaguaí Port. Established in the harbor of Sepetiba, the mentioned port has a privileged highway, railroad, and maritime access.

 

TECON is responsible for the movement and storage of containers, vehicles, steel products, general cargo, among other products, and TECAR performs the operational activities of loading and unloading of solid bulk ships, storage and distribution (road and rail) of coal, coke, petroleum coke, clinker, zinc concentrate, sulfur, iron ore and other bulk, intended for the seaborne market, for our own operation and for different customers.

 

·

Energy:

 

Since the energy supply is fundamental in CSN”s production process, the Company has electricity generation assets to mitigate costs, aiming at greater competitiveness.

 

On June 30, 2022, the Company's subsidiaries, CSN Cimentos and CSN Energia S.A. ("CSN Energia"), completed the acquisition of Santa Ana Energética S.A. (“Santa Ana”), as well as Topázio Energética S.A. ("Topázio") and, indirectly, Brasil Central Energia Ltda. ("BCE"), a subsidiary of Topázio, under the terms of the Share Purchase Agreement entered into on April 8, 2022 with Brookfield Americas Infrastructure (Brazil Power) Fundo de Investimento em Participações Multiestratégia, private equity fund managed by Brookfield Brasil Asset Management Investimentos Ltda. On October 7, 2022, subsidiaries CSN Mineração and CSN Energia S.A. concluded the acquisition of 100% of the shares of Companhia Energética Chapecó – CEC, holder of the grant of Quebra-Queixo Hydroelectric Power Plant (“Chapecó”), as provided for in the Agreement for the Purchase and Sale of Shares and Other Covenants and in the Private Instrument of Assignment of Rights and Obligations entered into on July 1, 2022 and July 25, 2022, respectively.

 

In July 2022, the Company won the auction held by the State of Rio Grande do Sul, for the sale of 100% of the shares in its possession, 6,381,908 equivalent to 66.23% of the share capital, of Companhia Estadual de Energia Elétrica - CEEE-G, as part of the CEEE Group privatization program, in accordance with State Law 15.298/19.On October 21, 2022, the transaction was completed with payment by the company of the auction winning price. On December 22, 2022, the acquisition of Eletrobras' 32.74% interest in CEEE-G. On November 22, 2023, the post-takeover bid auction was settled, in which CFB acquired 1,271

(one thousand two hundred and seventy-one) common shares and 338 (three hundred and thirty-eight) preferred shares issued by CEEE-G, was concluded the Company currently holds 99% of the share capital of CEEE-G.

 

·

Going Concern:

 

Management understands that the Company has adequate resources to continue its operations. Accordingly, the Company's interim financial information for the period ended March 31, 2024, have been prepared on a going concern basis.

 

2.

BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE

 

2.a)

Statement of compliance

 

The parent company and consolidated interim financial information (“interim financial information”) have been prepared and are being presented in accordance with the accounting practices adopted in Brazil issued by the Brazilian Accounting Pronouncements Committee (“CPC”), approved by the Brazilian Securities and Exchange Commission (“CVM”) and by the Brazilian Federal Accounting Council (“CFC”), and in accordance with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standard Board (“IASB”) and disclose all the relevant information of the interim financial information, and only this information, which corresponds to that used by the Company's management in its activities. The consolidated interim financial information are identified as “Consolidated” and the parent company's individual interim financial information are identified as “Parent Company”.

 

2.b)

Basis of presentation

 

The interim financial statements were prepared based on the historical cost and were adjusted to reflect: (i) the fair value measurement of certain financial assets and liabilities (including derivative instruments), as well as pension plan assets; and (ii) impairment losses. When IFRS and CPCs allows the option between cost or another measurement criterion, the cost of acquisition criterion was used.

 

The preparation of these interim financial statements requires Management to use certain accounting estimates, judgments and assumptions that affect the application of Accounting Polices and the amounts reported on the balance sheet date of assets, liabilities, income, and expenses may differ from actual future results. The assumptions used are based on history and other factors considered relevant and are reviewed by the Company’s management.

 

The interim financial information has been prepared and is being presented in accordance with CPC 21 (R1) - “Interim Financial Reporting” and IAS 34 - “Interim Financial Reporting”, consistently with the standards issued by the CVM. This interim financial information does not include all requirements of annual or full financial statements and, accordingly, should be read in conjunction with the Company’s financial statements for the year ended December 31, 2023.

 

The new standards adopted for financial years beginning on or after January 1, 2024 are described in Note 2.e.

 

Therefore, in this interim financial information the following notes are not repeated, either due to redundancy or to the materiality in relation to those already presented in the annual financial statements:

 

Note 18 - Installment taxes

Note 29 - Employee benefits

Note 30 - Commitments

Note 31 - Insurance

 

The consolidated financial statements were approved by Board of Directors on May 09, 2024.

 

2.c)

Functional currency and presentation currency

 

The accounting records included in the interim financial statements of each of the Company’s subsidiaries are measured using the currency of the principal of the economic environment in which each subsidiary operates (“the functional currency”). The consolidated and parent company interim financial statements are presented in BRL (reais), which is the Company’s functional and reporting currency.

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the transaction or valuation dates, in which the items are remeasured. The balances of the asset and liability accounts are converted using the exchange rate on the balance sheet date. As of March 31, 2024, US$1.00 was equivalent to BRL 4.9962 (BRL 4.8413on December 31, 2023) and €1.00 was equivalent to BRL 5.3979 (BRL 5.3516 on December 31, 2023), according to the rates obtained from Central Bank of Brazil website.

 

2.d)

Statement of value added

 

Pursuant to Law 11,638/07, the presentation of the statement of added value is required for all publicly held companies. These statements were prepared in accordance with CPC 09 - Added Value Statement. The IFRS does not require the presentation of this statement and for IFRS purposes is presented as additional information.

2.e)

Adoption of new requirements, standards, amendments and interpretations

 

The new requirements, standards, amendments and interpretations that came into force for fiscal years starting on January 1, 2024, are:

 

• Amendment to IFRS 16 – Lease Liability in a Sale and Leaseback;

 

• Amendments to IAS 1 – Classification of liabilities as "Current" or "Non-Current";

 

• Amendments to IAS 7 and IFRS 7 – Disclosures on drawn-risk operations.

 

In relation to the aforementioned changes, the Company did not identify significant impacts that would alter its disclosure in terms of the adoption and interpretation of the rules; with the exception of the amendments to IAS 7 and IFRS 7, as a result of the addition of items 44F and 44H to Technical Pronouncement CPC 03 (R2) – Cash flow statements, which provide greater detail on drawn risk operations (also referred to as "forfaiting" throughout the report, in its note 15.a. Suppliers - Drawn risk.

 

3.

CASH AND CASH EQUIVALENTS

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Cash and banks
Brazil	707,038		103,383		25,824		73,819
Abroad	7,242,848		10,797,192		16,259		140,400
	7,949,886		10,900,575		42,083		214,219
Investments
Brazil	5,697,317		4,227,916		1,966,022		2,052,232
Abroad	1,211,162		917,727		1,401		3,619
	6,908,479		5,145,643		1,967,423		2,055,851
	14,858,365		16,046,218		2,009,506		2,270,070

 

Our investments are basically in private and public securities with yields linked to the variation of Interbank Deposit Certificates (CDI) and repo operations backed by National Treasury Notes, respectively. The Company invests part of the funds through exclusive investment funds which have been consolidated in this interim financial information.

 

The financial resources available abroad, held in dollars and euros, are invested in private securities, in banks considered by the Administration to be first-rate and are remunerated at pre-fixed rates.

  

4.

FINANCIAL INVESTMENTS

 

								Consolidated								Parent Company
		Current				Non-current				Current				Non-current
		03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Investments (1)		41,259		39,800		137,428		139,949		32,745		31,505
Usiminas shares (2)		1,551,033		1,493,204						1,551,033		1,493,204
Bonds (3)						114,912		111,350						114,913		111,350
		1,592,292		1,533,004		252,340		251,299		1,583,778		1,524,709		114,913		111,350

 

(1)

These are restricted financial investments and linked to a Bank Deposit Certificate (CDB) to guarantee a letter of guarantee from financial institutions and financial investments in Public Securities (LFT - Letras Financeiras do Tesouro) managed by their exclusive funds. As of March 31, 2024, R$123,870 is restricted as collateral for a liability of the subsidiary CSN Cimentos Brasil and its redemption period is undetermined.

(2)

A guarantee (fiduciary alienation) was constituted over a portion of the shares of Usiminas Siderúrgica de Minas Gerais S.A. held by the Company.

(3)

Bonds with banco Fibra maturing in February 2028 (see note 20.a).

 

5. TRADE RECEIVABLES

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Trade receivables
Third parties
Domestic market	1,726,575		1,525,773		952,683		872,666
Foreign market	723,986		1,801,677		34,364		31,176
	2,450,561		3,327,450		987,047		903,842
Allowance for doubtful debts	(249,600)		(226,053)		(141,248)		(119,558)
	2,200,961		3,101,397		845,799		784,284
Related parties (note 20 a)	285,821		168,367		1,300,828		1,086,083
	2,486,782		3,269,764		2,146,627		1,870,367

 

The composition of the gross balance of accounts receivable from third party consumers is shown as follows:

 

				Consolidated				Parent Company
		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Current		2,113,493		2,938,483		827,406		720,879
Past-due up to 30 days		81,106		129,846		8,540		55,754
Past-due up to 180 days		90,000		36,568		54,593		31,248
Past-due over 180 days		165,962		222,553		96,508		95,961
		2,450,561		3,327,450		987,046		903,842

 

The changes in estimated credit losses are as follows:

 

				Consolidated				Parent Company
		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Opening balance		(226,053)		(232,830)		(119,558)		(122,872)
(Loss)/Reversal estimated		(27,519)		(2,959)		(24,304)		(251)
Recovery and write-offs of receivables		3,972		9,736		2,614		3,565
Closing balance		(249,600)		(226,053)		(141,248)		(119,558)

 

 

 

6.

INVENTORIES

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Finished goods	3,800,705		3,856,491		2,332,038		2,121,712
Work in progress	3,379,087		3,316,396		1,677,846		1,622,987
Raw materials	2,673,221		2,607,079		1,870,289		1,820,109
Storeroom supplies	1,255,782		1,225,963		575,088		566,961
Advances to suppliers	104,472		85,623		90,932		61,119
Provision for losses	(91,561)		(121,871)		(28,977)		(24,304)
	11,121,706		10,969,681		6,517,216		6,168,584
Classified:
Current	9,619,777		9,557,578		6,517,216		6,168,584
Non-current (1)	1,501,929		1,412,103
	11,121,706		10,969,681		6,517,216		6,168,584

(1)

Long-term iron ore inventories that will be used after the construction of the processing plant, which will produce pellet feed.

 

The changes in estimated losses on inventories are as follows:

 

				Consolidated				Parent Company
		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Opening balance		(121,871)		(96,493)		(24,304)		(16,124)
Reversal/(Estimated losses)  of inventories with low turnover and obsolescence		30,310		(25,378)		(4,673)		(8,180)
Closing balance		(91,561)		(121,871)		(28,977)		(24,304)

 

 

7.

RECOVERABLE TAXES

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
State Value-Added Tax	1,773,830		1,492,575		1,280,985		1,015,444
Brazilian federal contributions (1)	2,727,384		2,729,606		1,766,236		1,592,694
Other taxes	62,100		59,316		61,310		68,391
	4,563,314		4,281,497		3,108,531		2,676,529
Classified:
Current	2,091,628		1,744,074		1,282,740		855,663
Non-current	2,471,686		2,537,423		1,825,791		1,820,866
	4,563,314		4,281,497		3,108,531		2,676,529

 

 

8.

OTHER CURRENT AND NON-CURRENT ASSETS

 

Other current and non-current assets are as follows:

 

							Consolidated								Parent Company
	Current				Non-current				Current				Non-current
	03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Judicial deposits (note 18)					494,511		491,882						204,946		210,833
Derivative financial instruments (note 13.a)	985,998		32,211						9,808		12,122
Dividends receivable	180,917		185,178						579,327		562,938
Prepaid expenses	368,543		416,556		68,569		83,557		262,904		248,472		55,485		64,652
Prepaid expenses	368,543		416,556		28,218		44,027		262,904		248,472		23,779		33,645
Actuarial asset (note 20.a)					40,351		39,530						31,706		31,007
Receivables from related parties	13,596		13,625		3,511,956		3,451,991		366,526		222,467		4,001,732		3,889,118
Loans with related parties (note 20.a)	5,287		5,316		1,719,377		1,659,412		5,287		5,316		2,209,145		2,096,536
Other receivables from related parties (note 20.a)	8,309		8,309		1,792,579		1,792,579		361,239		217,151		1,792,587		1,792,582
Other assets	319,112		279,492		1,263,221		1,283,061		46,357		34,478		1,228,440		1,235,145
Trading securities	5,797		7,198						5,648		7,054
Compulsory loans from Eletrobrás					62,458		62,913						59,688		60,136
Employee debts	84,805		61,332						40,271		27,166
Receivables by indemnity (1)	106,405		106,405		1,167,671		1,173,922						1,167,671		1,173,922
Term of Agreement GSF DFESA (2)	14,264		14,264		13,075		16,642
Advances from Suppliers	20,534		10,158
Others	87,307		80,135		20,017		29,584		438		258		1,081		1,087
	1,868,166		927,062		5,338,257		5,310,491		1,264,922		1,080,477		5,490,603		5,399,748

 

 

(1)

In December 2023, R$106,405 was recognized in connection with an income tax dispute abroad. In April 2023, the subsidiary CEEE-G recognized the amount of R$ 37,486, referring to the Taxes and Contributions Amounts (VIC) of the Hydroelectric Plants committed to Physical Guarantee Quota Contracts (CCGFs).In the 3rd quarter of 2022, the uncontroversial amount of R$422,254 was recognized in the same account, as a refund of the amounts overpaid for railroad freight from April 1994 to March 1994 and March 1996 to the company RFFSA, and that after its extinction, the Federal Government became a defendant. Additionally, in 2020, a credit was recognized, which is a net, certain and payable amount, arising from the final and unappealable decision of a court in favor of the Company, due to losses and damages arising from voltage sinking in the energy supply in the periods from January/1991 to June/2002, in the amount of R$ 561,466.

(2)

On February 8, 2022, ANEEL approved the renegotiation of the hydrological risk (GSF - Generation Scaling Factor) of the Dona Francisca HPP, according to Authorizing Resolution No. 11,132. In this sense, the extension of the Plant Concession was granted in 1,485 days, passing the end of the granting of 02/28/2033 to 09/21/2037. Once this stage was overcome, the Term of Agreement signed between CEEE-G and Dona Francisca Energética S.A. became effective - DFESA, a contract that redistributes the risks of the Consortium, with the physical guarantee of the Plant, the hydrological risk and the engineering risk in proportion to the Dona Francisca's participation (85%) and CEEE-G (15%) in the project, see explanatory note no. 1.1.2. In view of this redistribution, DFESA will pay the CEEE-G the amount of R$ 57,056, in 48 installments, to be paid, as of March 2022, with credit updating by 100% of the CDI, already 26 (twenty-six) installments were received.

 

9.

BASIS OF CONSOLIDATION AND INVESTMENTS

 

The information related to the activities of jointly controlled subsidiaries, joint operations, associates and other investments did not change in relation to what was disclosed in the Company's financial statements as of December 31, 2023. Therefore, Management decided not to repeat them in the accounting information interim of March 31, 2024.

 

 

		Equity interests (%)
Companies		03/31/2024		12/31/2023		Core business
Direct interest in subsidiaries: full consolidation
CSN Islands VII Corp.		100.00		100.00		Financial transactions
CSN Inova Ventures		100.00		100.00		Equity interests and Financial transactions
CSN Islands XII Corp.		100.00		100.00		Financial transactions
CSN Steel S.L.U.		100.00		100.00		Equity interests and Financial transactions
TdBB S.A (*)		100.00		100.00		Equity interests
Sepetiba Tecon S.A.		99.99		99.99		Port services
Minérios Nacional  S.A.		99.99		99.99		Mining and Equity interests
Companhia Florestal do Brasil		99.99		99.99		Reforestation
Estanho de Rondônia S.A.		99.99		99.99		Tin Mining
Companhia Metalúrgica Prada		99.89		99.89		Manufacture of containers and distribution of steel products
CSN Mineração S.A.		79.75		79.75		Mining
CSN Energia S.A.		99.99		99.99		Sale of electric power
FTL - Ferrovia Transnordestina Logística S.A.		92.71		92.71		Railroad logistics
Nordeste Logística S.A.		99.99		99.99		Port services
CSN Inova Ltd.		100.00		100.00		Advisory and implementation of new development projec
CBSI - Companhia Brasileira de Serviços de Infraestrutura		99.99		99.99		Equity interests and product sales and iron ore
CSN Cimentos Brasil S.A.		99.99		99.99		Manufacturing and sale of cement
Berkeley Participações e Empreendimentos S.A.		100.00		100.00		Electric power generation and equity interests
CSN Inova Soluções S.A.		99.99		99.99		Equity interests
CSN Participações I		99.90		99.99		Equity interests
Circula Mais Serviços de Intermediação Comercial S.A.		0.10		0.01		Commercial intermediation for the purchase and sale of assets and materials in general
CSN Participações III		99.90		99.99		Equity interests
CSN Participações IV		99.90		99.99		Equity interests
CSN Participações V		99.90		99.99		Equity interests
Indirect interest in subsidiaries: full consolidation
Lusosider Projectos Siderúrgicos S.A.		100.00		100.00		Equity interests and product sales
Lusosider Aços Planos, S. A.		100.00		99.99		Steel and Equity interests
CSN Resources S.A.		100.00		100.00		Financial transactions and Equity interests
Companhia Brasileira de Latas		99.89		99.88		Sale of cans and containers in general and Equity interests
Companhia de Embalagens Metálicas MMSA		99.88		99.87		Production and sale of cans and related activities
Companhia de Embalagens Metálicas - MTM		99.88		99.87		Production and sale of cans and related activities
CSN Productos Siderúrgicos S.L.		100.00		100.00		Financial transactions, product sales and Equity interests
Stalhwerk Thüringen GmbH		100.00		100.00		Production and sale of long steel and related activities
CSN Steel Sections Polska Sp.Z.o.o		100.00		100.00		Financial transactions, product sales and Equity interests
CSN Mining Holding, S.L.U.		79.75		79.75		Financial transactions, product sales and Equity interests
CSN Mining GmbH		79.75		79.75		Financial transactions, product sales and Equity interests
CSN Mining Asia Limited		79.75		79.75		Commercial representation
Lusosider Ibérica S.A.		100.00		100.00		Steel, commercial and industrial activities and equity interests
CSN Mining Portugal, Unipessoal Lda.		79.75		79.75		Commercial and representation of products
Companhia Siderúrgica Nacional, LLC		100.00		100.00		Import and distribution/resale of products
Elizabeth Cimentos S.A.		99.98		99.98		Manufacturing and sale of cement
Santa Ana Energética S.A.		99.98		99.99		Electric power generation
Topázio Energética S.A.		99.98		99.99		Electric power generation
Brasil Central Energia Ltda.		99.98		99.99		Electric power generation
Circula Mais Serviços de Intermediação Comercial S.A.		99.90		99.99		Commercial intermediation for the purchase and sale of assets and materials in general
Metalgráfica Iguaçu S.A		99.89		99.89		Metal packaging manufacturing
Companhia Energética Chapecó		79.75		79.75		Electric power generation
Companhia Estadual de Geração de Energia Elétrica - CEEE-G		98.98		98.98		Electric power generation
Ventos de Vera Cruz S.A.		98.97		98.97		Electric power generation
Ventos de Curupira S.A		98.97		98.97		Electric power generation
Ventos de Povo Novo S.A.		98.97		98.97		Electric power generation
MAZET - Maschinenbau und Zerspanungstechnik Unterwellwnborn GmbH		100.00		100.00		Production and sale of long steel and related activities
CSN Mining Internacional GmbH		79.75		79.75		Commercial and representation of products
CSN International Steel GmbH (1)		100.00				Commercial and representation of products
Direct interest in joint operations: proportionate consolidation
Itá Energética S.A.		48.75		48.75		Electric power generation
Consórcio da Usina Hidrelétrica de Igarapava		17.92		17.92		Electric power consortium
Consórcio Itaúba		36.60		36.60	;	Electric power generation
Consórcio Passo Real		46.97		46.97		Electric power generation
Consórcio Dona Francisca		15.00		15.00		Electric power generation
Consórcio Ventos de Curupira		99.99		99.99		Electric power generation
Direct interest in joint ventures: equity method
MRS Logística S.A.		18.75		18.64		Railroad transportation
Aceros Del Orinoco S.A. (*)		31.82		31.82		Dormant company
Transnordestina Logística S.A.		48.03		48.03		Railroad logistics
Equimac S.A		50.00		50.00		Rental of commercial and industrial machinery and equipment
Consórcio Itaúba		63.40		63.40		Electric power generation
Consórcio Passo Real		53.03		53.03		Electric power generation
Indirect interest in joint ventures: equity method
MRS Logística S.A.		14.95		14.86		Railroad transportation
Direct interest in associates: equity method
Arvedi Metalfer do Brasil S.A.		20.00		20.00		Metallurgy and Equity interests
Panatlantica S.A. (2)		29.91				Steel
Indirect interest in affiliates: equity method
Jaguari Energética S.A.		10.50		10.39		Electric power generation
Chapecoense Geração S.A. (3)		9.00		8.91		Electric power generation
Companhia Energética Rio das Antas - Ceran (3)		30.00		29.69		Electric power generation
Ventos do Sul Energia S.A. (3)		10.00		9.90		Electric power generation
Foz Chapecó Energia S.A. (3)		9.00		8.91		Electric power generation
Exclusive funds: full consolidation
Diplic II  - Private credit balanced mutual fund		100.00		100.00		Investment fund
Caixa Vértice - Private credit balanced mutual fund		100.00		100.00		Investment fund
VR1 - Private credit balanced mutual fund		100.00		100.00		Investment fund

(*) Dormant companies.

 

(1) On March 7, 2024, CSN International Steel GmbH was incorporated by the Company's direct subsidiary, CSN Steel S.L.U

 

(2) On January 15, 2024, Panatlântica started to be valued using the equity method on account of the acquisition of 18.61% of the shares at a total price of R$ 150,000,000.00 (one hundred and fifty million reais), with the Company holding 29.91% of Panatlântica's capital. Prior to such acquisition, the Company valued the investment at fair value through the Result.

 

(3) On February 21, 2024, the Company became the holder of 100% of the shares of the subsidiary CEEE-g (as of December 31, 2023, 99%), and for this reason, there was a small percentage increase in the indirect participation of the companies Companhia Energética Rio das Antas – CERAN, Ventos do Sul Energia S.A., Chapecoense Geração S.A. and Foz Chapecó Energia S.A.

 

9.a)

Changes in investments in subsidiaries, joint ventures, joint operations, associates and other investments

 

The positions presented as of March 31, 2024 and the changes refer to the interest held by CSN in these companies:

		Consolidated
Companies		Final balance on 12/31/2023		Capital increase		Write-off		Dividends		Equity Income		Comprehensive income		Others		Amortization	Final balance on 03/31/2024
Investments under the equity method
Joint-venture, Joint-operation and Affiliate
MRS Logistica		2,381,607						(120)		116,530		14,608					2,512,625
Fair Value MRS		480,622															480,622
Fair Value MRS amortization		(93,971)														(2,937)	(96,908)
Transnordestina Logística S.A.		1,160,946								(6,645)							1,154,301
Fair Value -Transnordestina		659,106															659,106
Arvedi Metalfer do Brasil		35,487								1							35,488
Panatântica S.A. (1)				150,000						1,368		24,503		78,737			254,608
Equimac S.A		23,793								457							24,250
Indirect interest in affiliates - CEEE-G (²)		165,891								11,313				10,432			187,636
Fair Value indirect participation CEEE-G		319,709															319,709
Fair Value amortization indirect participation CEEE-G		(23,896)														(4,655)	(28,551)
		5,109,294		150,000				(120)		123,024		39,111		89,169		(7,592)	5,502,886
Other participations
Equity interests evaluated by the cost method (3)		50,093				(2,168)											47,925
Investments at fair value through profit or loss (1) (note 13)		78,737												(78,737)
Other		(947)												2,006			1,059
		127,883				(2,168)								(76,731)			48,984
Total shareholdings		5,237,177		150,000		(2,168)		(120)		123,024		39,111		12,438		(7,592)	5,551,870
Classification of investments in the balance sheet
Equity interests		5,237,177															5,551,870
Investment Property		205,954															205,693
Total investments in the asset		5,443,131															5,757,563

 

(1) The balance movement refers to the change in the valuation method of the Panatlântica investee due to the acquisitions of the aforementioned shares. As mentioned, the company, which was valued at fair value through results, started to be valued through the equity method.

 

(2) The balance in others refers mostly to canceled dividends.

 

(3) These are strategic investments in startups made by the subsidiary CSN Inova Ventures, which are valued using the cost method, in the following companies: Alinea Health Holdings Ltda. I.Systems Aut. Ind., 2D Materials, H2Pro Ltda, 1S1 Energy, Traive INC., OICO Holdingsand Global Dot, the latter acquired on June 5, 2023;

The reconciliation of equity in earnings of companies with shared control classified as joint ventures and associates and the amount presented in the income statement is presented below and results from the elimination of the results of CSN's transactions with these companies:

 

			Consolidated
	03/31/2024		03/31/2023
Result equivalence of affiliate, joint-venture and joint-operation
MRS Logística S.A.	116,530		54,374
Transnordestina	(6,645)		(3,677)
Arvedi Metalfer do Brasil	1		246
Equimac S.A	457		480
Indirect interest in affiliates - CEEE-G	11,313		12,530
Panatlantica	1,368		(26,291)
Fair Value Amortization	(7,592)
	115,432		37,662
Reclassification IAS 28 (1)	(22,120)		(14,018)
Others	8		(2,135)
Equity in results	93,320		21,509

 

(1) The operating margin of intercompany transactions with group companies classified as joint ventures, which are not consolidated, are reclassified in the Statement of Income from the Investment group to the costs and income tax and social contribution groups.

 

The changes in the Parent Company's investment are presented below:

 

 

 

		Parent Company
Companies		Final balance on 12/31/2023		Capital increase/acquisition of shares		Dividends		Equity Income		Comprehensive income		Others		Final balance on 03/31/2024
Investments under the equity method
Subsidiaries
CSN Steel S.L.U.		4,688,943						60,856		29,145				4,778,944
Sepetiba Tecon S.A.		372,251						2,581						374,832
Minérios Nacional  S.A.		143,737						(77)						143,660
Fair Value - Minérios Nacional		2,122,071												2,122,071
Companhia Metalúrgica Prada		321,641						(67,572)						254,069
Goodwill - Companhia Metalúrgica Prada		63,509												63,509
CSN Mineração S.A.		8,532,643						444,978		660,181				9,637,802
CSN Energia S.A.		24,445						(1,525)						22,920
FTL - Ferrovia Transnordestina Logística S.A.		131,031						(13,933)						117,098
Companhia Florestal do Brasil		1,331,941						(26,122)		(11,982)				1,293,837
CBSI - Companhia Brasileira de Serviços de Infraestrutura		37,951						17,087						55,038
Goodwill - CBSI - Companhia Brasileira de Serviços de Infraestrutura		15,225												15,225
CSN Cimentos Brasil S.A.		6,555,144						(39,622)						6,515,522
Others		370						(446)						(76)
		24,340,902						376,205		677,344				25,394,451
Joint-venture, Joint-operation and Affiliate
Itá Energética S.A.		193,122				(16,326)		(1,684)						175,112
MRS Logística S.A.		1,191,104				(63)		58,284		7,367				1,256,692
Transnordestina Logística S.A.		1,160,944						(6,645)						1,154,299
Fair Value -Transnordestina		659,106												659,106
Equimac S.A		23,793						457						24,250
Panatântica S.A.				150,000				1,368		24,503		78,737		254,608
Arvedi Metalfer do Brasil		35,488						1						35,489
		3,263,557		150,000		(16,389)		51,781		31,870		78,737		3,559,556
Other participations
Investments at fair value through profit or loss (note 13)		78,737										(78,737)
Profits on subsidiaries' inventories		(20,109)						(23,163)						(43,272)
Other investments		29										1		30
		58,657						(23,163)				(78,736)		(43,242)
Total shareholdings		27,663,116		150,000		(16,389)		404,823		709,214		1		28,910,765
Subsidiaries with unsecured liabilities
CSN Islands VII Corp.		(2,516,395)						(106,059)						(2,622,454)
CSN Inova Ventures		(2,107,852)						(180,099)						(2,287,951)
CSN Islands XII Corp.		(3,286,160)						(209,185)						(3,495,345)
Estanho de Rondônia S.A.		(114,779)		32,000				(19,375)				1		(102,153)
Total subsidiaries with unsecured liabilities		(8,025,186)		32,000				(514,718)				1		(8,507,903)
Equity Income								(109,895)
Classification of investments in the balance sheet
Equity interests		27,663,116												28,910,765
Investment Property		137,761												137,209
Total active investments		27,800,877												29,047,974
Provision for Investments with Unsecured Liabilities (liabilities)		(8,025,186)												(8,507,903)
Total active and passive investments		19,775,691												20,540,071

 

9.b)

Joint ventures and joint operations financial information

 

The balance sheet and income statement balances of the companies with shared control are shown below and refer to 100% of the companies’ results:

 

								03/31/2024								12/31/2023
		Joint-Venture						Joint-Operation		Joint-Venture						Joint-Operation
Equity interest (%)		MRS Logística		Transnordestina Logística		Equimac S.A.		Itá Energética		MRS Logística		Transnordestina Logística		Equimac S.A.		Itá Energética
		37.49%		48.03%		50.00%		48.75%		37.27%		48.03%		50.00%		48.75%
Balance sheet
Current Assets
Cash and cash equivalents		3,054,347		695,067		14,991		99,098		3,388,052		786,007		13,953		93,712
Advances to suppliers		130,476		36,319		37		182		101,318		6,161		77		409
Other current assets		1,011,756		71,592		13,846		29,327		1,390,540		67,758		16,747		30,517
Total current assets		4,196,579		802,978		28,874		128,607		4,879,910		859,926		30,777		124,638
Non-current Assets
Other non-current assets		554,401		95,076		143		18,072		679,749		97,560		599		18,054
Investments, PP&E and intangible assets		12,937,443		12,268,659		55,687		288,812		12,774,225		12,062,189		48,570		296,818
Total non-current assets		13,491,844		12,363,735		55,830		306,884		13,453,974		12,159,749		49,169		314,872
Total Assets		17,688,423		13,166,713		84,704		435,491		18,333,884		13,019,675		79,946		439,510
Current Liabilities
Borrowings and financing		993,674		186,421		19,099				993,367		167,201		8,552
Lease liabilities		585,520				716				565,002				684
Other current liabilities		1,334,116		68,144		9,313		52,660		2,111,251		80,851		8,310		21,222
Total current liabilities		2,913,310		254,565		29,128		52,660		3,669,620		248,052		17,546		21,222
Non-current Liabilities
Borrowings and financing		5,669,165		8,634,072		4,698				5,879,207		8,481,707		12,734
Lease liabilities		1,516,836								1,665,072				253
Other non-current liabilities		887,440		1,875,224		2,380		23,626		729,736		1,873,232		1,827		22,140
Total non-current liabilities		8,073,441		10,509,296		7,078		23,626		8,274,015		10,354,939		14,814		22,140
Shareholders’ equity		6,701,672		2,402,852		48,498		359,205		6,390,249		2,416,684		47,586		396,148
Total liabilities and shareholders’ equity		17,688,423		13,166,713		84,704		435,491		18,333,884		13,019,675		79,946		439,510

 

		03/01/2024 to 03/31/2024								01/01/2023 a 03/31/2023
		Joint-Venture						Joint-Operation				Joint-Venture				Joint-Operation
Equity interest (%)		MRS Logística		Transnordestina Logística		Equimac S.A.		Itá Energética		MRS Logística		Transnordestina Logística		Equimac S.A.		Itá Energética
		37.49%		48.03%		50.00%		48.75%		37.27%		48.03%		50.00%		48.75%
Statements of Income
Net revenue		1,643,868		557		10,992		45,616		1,245,406		458		8,457		47,816
Cost of sales and services		(837,184)				(6,135)		(29,543)		(777,643)				(4,765)		(20,720)
Gross profit		806,684		557		4,857		16,073		467,763		458		3,692		27,096
Operating (expenses) income		(42,759)		(10,749)		(1,242)		(20,809)		(78,218)		(8,822)		(846)		(20,074)
Financial income (expenses), net		(280,768)		(3,642)		(378)		1,300		(162,344)		710		(594)		1,025
Profit / (loss) for the year		483,157		(13,834)		3,237		(3,436)		227,201		(7,654)		2,252		8,047
Current and deferred income tax and social contribution		(167,297)				(1,299)		17		(81,308)				(317)		(2,851)
Profit / (loss) for the year		315,860		(13,834)		1,938		(3,419)		145,893		(7,654)		1,935		5,196

 

 

9.c)

TRANSNORDESTINA LOGÍSTICA S.A. (“TLSA”)

 

TSA is primarily engaged in the public service operation and development of a railroad network in the Northeast of Brazil, comprising the rail links Velha-Salgueiro, Salgueiro-Trindade, Trindade-Eliseu Martins, Salgueiro- Porto de Suape, and Missão Velha-Porto de Pecém (“Malha II”). On December 23, 2022, after extensive negotiations involving ANTT, TCU and the then Ministry of Infrastructure, signed first amendment to the Concession Agreement , which redefined the scope and deadlines for completion of the TLSA sections, notably to provide for the return of the section Salgueiro-Porto de Suape, which results in a project with the current 1,206 km of rail network and completion deadline up to December 2029.

 

Management relies on resources from its shareholders and third parties to complete the work, which is expected to be available, based on previously conducted agreements and recent discussions between the parties involved. After evaluating this matter, Management concluded that the use of the project’s business continuity accounting basis in the preparation of the interim financial information was considered appropriate.

 

9.d)

Investment Properties:

 

The balance of investment properties is shown below:

 

		Consolidated						Parent Company
		Land		Buildings		Total		Land		Buildings		Total
Balance at December 31, 2023		156,811		49,143		205,954		94,257		43,504		137,761
Cost		156,811		82,737		239,548		94,257		74,392		168,649
Accumulated depreciation				(33,594)		(33,594)				(30,888)		(30,888)
Balance at December 31, 2023		156,811		49,143		205,954		94,257		43,504		137,761
Depreciation (note 24)				(987)		(987)				(552)		(552)
Transfer Between Groups - Fixed Assets and Intangibles		726				726
Balance at March 31, 2024		157,537		48,156		205,693		94,257		42,952		137,209
Cost		157,537		83,285		240,822		94,257		74,392		168,649
Accumulated depreciation				(35,129)		(35,129)				(31,440)		(31,440)
Balance at March 31, 2024		157,537		48,156		205,693		94,257		42,952		137,209

 

Management's estimate of the fair value of investment properties was made for December 31, 2023.

December 31, 2023. The fair value of investment property in the consolidated financial statements on December 31, 2023 is R$2,235,614 (R$2,163,610 on December 31, 2022) and in the parent company R$2,117,924 (R$2,117,924 on December 31, 2022)

 

The average estimated useful lives for the periods are as follows (in years):

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Buildings	28		28		29		29

 

 

10.

PROPERTY, PLANT AND EQUIPMENT

 

	Consolidated
	Land		Buildings and Infrastructure		Machinery, equipment and facilities		Furniture and fixtures		Construction in progress (*)		Right of use (i)		Other (**)		Total
Balance at December 31, 2023	525,307		4,532,319		17,419,522		45,917		4,425,130		674,786		304,477		27,927,458
Cost	525,307		9,110,694		39,597,174		297,916		4,425,130		1,126,977		860,818		55,944,016
Accumulated depreciation			(4,578,375)		(22,177,652)		(251,999)				(452,191)		(556,341)		(28,016,558)
Balance at December 31, 2023	525,307		4,532,319		17,419,522		45,917		4,425,130		674,786		304,477		27,927,458
Effect of foreign exchange differences	763		1,180		2,482		23		1,162		1,282		176		7,068
Acquisitions	1,105				19,373		944		771,316		202		7,609		800,549
Capitalized interest (note 26) (1)									37,680						37,680
Write-offs (note 25) (2)					(10,016)				(1,123)		(855)		(10)		(12,004)
Depreciation (note 24)			(71,675)		(692,141)		(2,752)				(49,096)		(21,202)		(836,866)
Transfers to other asset categories			171,757		840,319		6,245		(1,046,946)				28,625
Transfer between groups - intangible assets and investment property	(726)								(12,834)				(48)		(13,608)
Right of use - Remesurement											100,698				100,698
Others					(1,140)				(12,618)				3		(13,755)
Balance at March 31, 2024	526,449		4,633,581		17,578,399		50,377		4,161,767		727,017		319,630		27,997,220
Cost	526,449		9,291,913		40,467,235		305,226		4,161,767		1,202,646		881,142		56,836,378
Accumulated depreciation			(4,658,332)		(22,888,836)		(254,849)				(475,629)		(561,512)		(28,839,158)
Balance at March 31, 2024	526,449		4,633,581		17,578,399		50,377		4,161,767		727,017		319,630		27,997,220

 

		Parent Company
		Land		Buildings and Infrastructure		Machinery, equipment and facilities		Furniture and fixtures		Construction in progress (*)		Right of use (i)		Other (**)		Total
Balance at December 31, 2023		25,618		284,330		7,097,152		9,508		814,174		6,067		51,966		8,288,815
Cost		25,618		534,794		16,938,652		101,426		814,174		41,584		171,615		18,627,863
Accumulated depreciation				(250,464)		(9,841,500)		(91,918)				(35,517)		(119,649)		(10,339,048)
Balance at December 31, 2023		25,618		284,330		7,097,152		9,508		814,174		6,067		51,966		8,288,815
Acquisitions						14,003		357		371,235						385,595
Capitalized interest (note 26)										15,104						15,104
Write-offs (note 25)						(2,216)										(2,216)
Depreciation (note 24)				(4,766)		(304,506)		(439)				(2,495)		(2,735)		(314,941)
Transfers to other asset categories				19,106		245,635		455		(266,607)				1,411
Transfer between groups - intangible assets and investment property										(551)						(551)
Right of use - Remesurement												82				82
Others														3		3
Balance at March 31, 2024		25,618		298,670		7,050,068		9,881		933,355		3,654		50,645		8,371,891
Cost		25,618		553,899		17,196,074		102,239		933,355		41,665		173,027		19,025,877
Accumulated depreciation				(255,229)		(10,146,006)		(92,358)				(38,011)		(122,382)		(10,653,986)
Balance at March 31, 2024		25,618		298,670		7,050,068		9,881		933,355		3,654		50,645		8,371,891

 

(*) Progress in business expansion projects stands out, mainly Expansion of the port in Itaguaí and Casa de Pedra, Itabirito, Tailings recovery from dams, Projects of new integrated cement plants and repair of coke batteries at the Plant President Vargas added capitalized interest in the period.

(**) Refer substantially to: i) in the consolidated table: assets for railway use, such as yards, rails, mines, and sleepers; and ii) in the parent company's table: improvements to third-party assets, vehicles and hardware.

 

(i)

Right of use

 

Below are the movements of the right of use:

 

 

									Consolidated
	Land		Buildings and Infrastructure		Machinery, equipment and facilities		Others		Total
Balance at December 31, 2023	512,923		86,057		54,149		21,657		674,786
Cost	629,004		143,926		254,640		99,407		1,126,977
Accumulated depreciation	(116,081)		(57,869)		(200,491)		(77,750)		(452,191)
Balance at December 31, 2023	512,923		86,057		54,149		21,657		674,786
Effect of foreign exchange differences			1,111		59		112		1,282
Addition	202								202
Remesurement	1,611		473		96,432		2,182		100,698
Depreciation	(9,481)		(3,486)		(34,120)		(2,009)		(49,096)
Write-offs					(855)				(855)
Balance at March 31, 2024	505,255		84,155		115,665		21,942		727,017
Cost	630,729		143,430		333,297		99,083		1,206,539
Accumulated depreciation	(125,474)		(59,275)		(217,632)		(77,141)		(479,522)
Balance at March 31, 2024	505,255		84,155		115,665		21,942		727,017

 

								Parent Company
		Land		Machinery, equipment and facilities		Others		Total
Balance at December 31, 2023		5,110		957				6,067
Cost		37,416		2,477		1,691		41,584
Accumulated depreciation		(32,306)		(1,520)		(1,691)		(35,517)
Balance at December 31, 2023		5,110		957				6,067
Remesurement		82						82
Depreciation		(2,290)		(205)				(2,495)
Balance at March 31, 2024		2,902		752				3,654
Cost		37,497		2,477		1,691		41,665
Accumulated depreciation		(34,595)		(1,725)		(1,691)		(38,011)
Balance at March 31, 2024		2,902		752				3,654

 

The average estimated useful lives are as follows (in years):

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Buildings and Infrastructure	34		33		30		30
Machinery, equipment and facilities	18		20		19		23
Furniture and fixtures	11		11		13		13
Others	11		10		10		10

 

 

11.   INTANGIBLE ASSETS

 

	Consolidated														Parent Company
	Goodwill		Customer relationships		Software		Trademarks and patents		Rights and licenses (*)		Others		Total		Goodwill		Software		Total
Balance at December 31, 2023	4,126,255		85,276		17,708		213,997		6,090,962		2,283		10,536,481				57,882		57,882
Cost	4,675,302		718,929		276,617		217,560		6,431,706		2,283		12,322,397				190,240		190,240
Accumulated amortization	(549,047)		(633,653)		(258,909)		(3,563)		(340,744)				(1,785,916)				(132,358)		(132,358)
Balance at December 31, 2023	4,126,255		85,276		17,708		213,997		6,090,962		2,283		10,536,481				57,882		57,882
Effect of foreign exchange differences			480		21		1,935						2,436
Acquisitions					116								116
Transfer between groups - fixed assets and investment property					44,483				(31,601)				12,882				551		551
Amortization (note 24)			(18,412)		(5,096)		(4)		(35,395)				(58,907)				(3,218)		(3,218)
Balance at March 31, 2024	4,126,255		67,344		57,232		215,928		6,023,966		2,283		10,493,008				55,215		55,215
Cost	4,675,302		724,898		321,244		219,495		6,400,105		2,283		12,343,327		81,169		190,791		271,960
Accumulated amortization	(549,047)		(657,554)		(264,012)		(3,567)		(376,139)				(1,850,319)		(81,169)		(135,576)		(216,745)
Balance at March 31, 2024	4,126,255		67,344		57,232		215,928		6,023,966		2,283		10,493,008				55,215		55,215

 

(*) Composed mainly of: (i) mining rights whose amortization is based on the volume of production and (ii) Concession agreement for use of water resources in the acquisition of control of the State Electric Power Generation Company, the amortization is carried out for the term of the contract.

The average estimated useful lives are as follows (in years):

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Software	10		10		9		9
Customer relationships	13		13

 

 

11.a)

Goodwill impairment test

 

Goodwill arising from expected future profitability of acquired companies and intangible assets with indefinite useful lives (brands) were allocated to CSN’s cash generating units (CGUs) which represent the lowest level of assets or group of assets of the Company. According to CPC 01(R1)/IAS36, when a CGU has an intangible asset with no defined useful life allocated, the Company must perform an impairment test.

 

12.

BORROWINGS, FINANCING AND DEBENTURES

 

The balances of borrowings, financing and debentures that are recorded at amortized cost are as follows:

 

									Consolidated		Parent Company
			Current Liabilities				Non-current Liabilities				Current Liabilities			Non-current Liabilities
			03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023	03/31/2024		12/31/2023
Foreign Debt
Floating Rates:
Prepayment			1,698,042		548,230		5,563,102		6,576,696		1,301,275		224,292	673,488		1,805,805
Fixed Rates:
Bonds, Facility, CCE and ACC			2,719,599		2,079,972		18,975,508		17,815,926		1,958,382		1,471,915	749,430		1,123,182
Intercompany											323,490		490,966	9,937,658		7,197,800
Fixed interest in EUR
Intercompany											1,051,418		1,030,571	305,969		303,345
Facility			456,128		327,873		119,448		114,227
			4,873,769		2,956,075		24,658,058		24,506,849		4,634,565		3,217,744	11,666,545		10,430,132
Debt agreements in Brazil
Floating Rate Securities in R$:
BNDES/FINAME/FINEP, Debentures, NCE and CCB			4,218,886		4,745,721		13,226,955		13,265,267		1,833,854		2,395,570	7,735,065		7,738,683
			4,218,886		4,745,721		13,226,955		13,265,267		1,833,854		2,395,570	7,735,065		7,738,683
Total Borrowings and Financing			9,092,655		7,701,796		37,885,013		37,772,116		6,468,419		5,613,314	19,401,610		18,168,815
Transaction Costs and Issue Premiums			(80,732)		(88,429)		(508,629)		(526,408)		(21,561)		(24,850)	(62,393)		(65,974)
Total Borrowings and Financing + Transaction cost			9,011,923		7,613,367		37,376,384		37,245,708		6,446,858		5,588,464	19,339,218		18,102,841

 

 

12.a)

Borrowing and amortization, financing, and debentures

 

The following table shows amortization and funding during the period:

 

				Consolidated				Parent Company
		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Opening balance		44,859,075		40,918,742		23,691,305		21,413,268
New debts		2,175,868		15,753,501		2,537,558		10,018,056
Repayment		(1,803,177)		(9,892,344)		(1,024,549)		(6,985,915)
Payments of charges		(767,807)		(3,428,721)		(283,024)		(1,647,267)
Accrued charges (note 26)		962,176		3,664,313		423,245		1,797,838
Others (1)		962,174		(2,156,416)		441,541		(904,675)
Closing balance		46,388,309		44,859,075		25,786,076		23,691,305

 

(1)

Including unrealized exchange and monetary variations and funding cost.

 

The Company raised and amortized borrowings, financing and debentures during 2023, as shown below:

 

								Consolidated
								03/31/2024
Nature		New debts		Maturities		Repayment		Interest payment
Pre-Payment						(91,510)		(119,226)
Bonds, ACC, CCE and Facility		2,125,868		2024 to 2025		(953,916)		(227,998)
BNDES/FINAME/FINEP, Debentures, NCE, Facility and CCB		50,000		2024		(757,751)		(420,583)
		2,175,868				(1,803,177)		(767,807)

 

 

12.b)

Maturities of borrowings, financing and debentures presented in current and non-current liabilities

 

						Consolidated						Parent Company
						03/31/2024						03/31/2024
		Borrowings and financing in foreign currency		Borrowings and financing in national currency		Total		Borrowings and financing in foreign currency		Borrowings and financing in national currency		Total
Average rate		in Dollar 6.88%in Euro 5.34%		in Real 12.64%				in Dollar 3.42%in Euro 3.41%		in Real 12.99%
2024		2,890,328		3,990,247		6,880,575		2,685,048		1,733,194		4,418,242
2025		3,999,053		1,823,440		5,822,493		3,906,318		1,331,091		5,237,409
2026		2,283,993		2,600,708		4,884,701		557,117		2,049,193		2,606,310
2027		940,285		2,593,699		3,533,984		90,931		2,068,693		2,159,624
2028		7,080,473		1,392,436		8,472,909		2,874,439		1,351,693		4,226,132
2029 to 2031		9,218,563		2,199,652		11,418,215		3,356,944		611,574		3,968,518
After 2032		3,119,132		2,845,659		5,964,791		2,830,313		423,481		3,253,794
		29,531,827		17,445,841		46,977,668		16,301,110		9,568,919		25,870,029

 

· Covenants

 

The Company maintains contracts that provide for the fulfillment of certain non-financial obligations, as well as the maintenance of certain parameters and performance indicators, such as the equity ratio disclosure of its audited interim financial information according to regulatory deadlines or payment of commission for risk assumption, if the indicator of net debt to EBITDA reaches the levels foreseen in those contracts.

 

To the moment, the Company is compliant with the financial and non-financial obligations (covenants) of its existing contracts.

 

13.   FINANCIAL INSTRUMENTS

 

13.a)

Identification and valuation of financial instruments

 

The Company may operate with several financial instruments, with emphasis on cash and cash equivalents, including financial investments, marketable securities, accounts receivable from customers, accounts payable to suppliers and borrowings and financing. Additionally, we may also operate with derivative financial instruments, such as swap exchange rate swap, swap interest and derivatives with commodities.

 

Considering the nature of these instruments, their fair value is basically determined by the use of quotations in the capital markets in Brazil and the Mercantile and Futures Exchange. The amounts recorded in current assets and liabilities have immediate liquidity or maturity, mostly in the short term. Considering the terms and characteristics of these instruments, the carrying amounts approximate the fair values.

 

·

Classification of financial instruments

 

 

																		Consolidated
										03/31/2024								12/31/2023
		Notes		Fair value through other comprehensive income		Fair value through profit or loss		Measured at amortized cost		Balances		Fair value through other comprehensive income		Fair value through profit or loss		Measured at amortized cost		Balances
Assets
Current
Cash and cash equivalents		3						14,858,365		14,858,365						16,046,218		16,046,218
Short-term investments		4				1,551,033		41,259		1,592,292				1,493,204		39,800		1,533,004
Trade receivables		5						2,486,782		2,486,782						3,269,764		3,269,764
Dividends and interest on equity		8						180,917		180,917						185,178		185,178
Derivative financial instruments		8		699,592		286,406				985,998				32,211				32,211
Trading securities		8				5,797				5,797				7,198				7,198
Loans - related parties		8						5,287		5,287						5,316		5,316
Receivables by indemnity		8						106,405		106,405						106,405		106,405
Total				699,592		1,843,236		17,679,015		20,221,843				1,532,613		19,652,681		21,185,294
Non-current
Investments		4						252,340		252,340						251,299		251,299
Other trade receivables		8						7,522		7,522						10,406		10,406
Eletrobrás compulsory loan		8						62,457		62,457						62,913		62,913
Receivables by indemnity		8						1,167,671		1,167,671						992,577		992,577
Loans - related parties		8						1,719,377		1,719,377						1,659,412		1,659,412
Investments		9				1				1				78,737				78,737
Total						1		3,209,367		3,209,368				78,737		2,976,607		3,055,344
Total Assets				699,592		1,843,237		20,888,382		23,431,211				1,611,350		22,629,288		24,240,638
Liabilities
Current
Borrowings and financing		12						9,092,655		9,092,655						7,701,796		7,701,796
Leases		14						177,758		177,758						137,638		137,638
Trade payables		15						6,956,503		6,956,503						7,739,520		7,739,520
Trade payables -drawee risk		15.a						4,548,516		4,548,516						4,209,434		4,209,434
Dividends and interest on capital		16						80,553		80,553						80,624		80,624
Derivative financial instruments		16										672,280		263,747				936,027
Total								20,855,985		20,855,985		672,280		263,747		19,869,012		20,805,039
Non-current
Borrowings and financing		12						37,885,013		37,885,013						37,772,116		37,772,116
Leases		14						616,014		616,014						596,123		596,123
Trade payables		15						116,397		116,397						31,060		31,060
Derivative financial instruments		16				47,844				47,844				60,468				60,468
Concessions payable		16						73,713		73,713						74,177		74,177
Total						47,844		38,691,137		38,738,981				60,468		38,473,476		38,533,944
Total Liabilities						47,844		59,547,122		59,594,966		672,280		324,215		58,342,488		59,338,983

 

 

														Parent Company
								03/31/2024						12/31/2023
		Notes		Fair value through profit or loss		Measured at amortized cost		Balances		Fair value through profit or loss		Measured at amortized cost		Balances
Assets
Current
Cash and cash equivalents		3				2,009,506		2,009,506				2,270,070		2,270,070
Short-term investments		4		1,551,033		32,745		1,583,778		1,493,204		31,505		1,524,709
Trade receivables		5				2,146,627		2,146,627				1,870,367		1,870,367
Derivative financial instruments		8		9,808				9,808		12,122				12,122
Dividends and interest on equity		8				579,327		579,327				562,938		562,938
Trading securities		8		5,648				5,648		7,054				7,054
Loans - related parties		8				5,287		5,287				5,316		5,316
Total				1,566,489		4,773,492		6,339,981		1,512,380		4,740,196		6,252,576
Non-current
Investments		4				114,913		114,913				111,350		111,350
Other trade receivables		8				1,003		1,003				1,003		1,003
Eletrobrás compulsory loan		8				59,688		59,688				60,136		60,136
Receivables by indemnity		8				1,167,671		1,167,671				992,577		992,577
Loans - related parties		8				2,209,144		2,209,144				2,096,536		2,096,536
Investments		9		1				1		78,737				78,737
Total				1		3,552,419		3,552,420		78,737		3,261,602		3,340,339
Total Assets				1,566,490		8,325,911		9,892,401		1,591,117		8,001,798		9,592,915
Liabilities
Current
Borrowings and financing		12				6,468,419		6,468,419				5,613,314		5,613,314
Leases		14				4,094		4,094				6,523		6,523
Trade payables		15				3,944,351		3,944,351				3,976,931		3,976,931
Trade payables -drawee risk		15.a				4,390,939		4,390,939				3,980,003		3,980,003
Dividends and interest on capital		16				5,159		5,159				5,230		5,230
Total						14,812,962		14,812,962				13,582,001		13,582,001
Non-current
Borrowings and financing		12				19,401,610		19,401,610				18,168,815		18,168,815
Leases		14				152		152				476		476
Trade payables		15				100,010		100,010				11,184		11,184
Total						19,501,772		19,501,772				18,180,475		18,180,475
Total Liabilities						34,314,734		34,314,734				31,762,476		31,762,476

 

 

·

Fair value measurement

 

The following table shows the financial instruments recorded at fair value by classifying them according to the fair value hierarchy:

 

Consolidated						03/31/2024						12/31/2023
		Level 1		Level 2		Balances		Level 1		Level 2		Balances
Assets
Current
Financial investments		1,551,033				1,551,033		1,493,204				1,493,204
Derivative financial instruments				286,406		286,406		32,211				32,211
Trading securities		5,797				5,797		7,198				7,198
Non-current
Investments		1				1		78,737				78,737
Total Assets		1,556,831				1,843,237		1,611,350				1,611,350
Liabilities
Current
Derivative financial instruments										263,747		263,747
Non-current
Derivative financial instruments				47,844		47,844				60,468		60,468
Total Liabilities				47,844		47,844				324,215		324,215

 

 

Level 1 - Data prices are quoted in an active market for items identical to the assets and liabilities being measured.

 

Level 2 - Consider inputs observable in the market, such as interest rates, exchange rates, etc., but are not prices negotiated in active markets.

 

Level 3 - There are no assets and liabilities classified as level 3.

 

13.b)

Financial risk management

 

The Company uses risk management strategies with guidance on the risks incurred by us. The nature and general position of financial risks are regularly monitored and managed in order to assess results and the financial impact on cash flow. Credit limits and hedge quality of counterparties are also reviewed periodically.

 

Market risks are hedged when we consider necessary to support the corporate strategy or when it is necessary to maintain the level of financial flexibility.

 

We are exposed to exchange rate, interest rate, market price and liquidity risks.

 

The Company may manage some of the risks through the use of derivative instruments not associated with any speculative trading or short selling.

 

·

Exchange rate risk

 

The exposure arises from the existence of assets and liabilities denominated in Dollar or Euro, since the Company’s functional currency is substantially the Real and is referred to as natural exchange exposure. The net exposure is the result of the offsetting of the natural exchange exposure by the instruments of hedge adopted by CSN.

 

The consolidated net exposure as of March 31, 2024, is shown below:

 

		03/31/2024		12/31/2023
Foreign Exchange Exposure		(Amounts in US$’000)		(Amounts in US$’000)
Cash and cash equivalents overseas		1,640,589		2,228,736
Trade receivables		57,588		292,028
Financial investments		15,113		15,597
Borrowings and financing		(5,897,589)		(5,615,893)
Trade payables		(495,710)		(524,622)
Others		(37,026)		(42,474)
Natural Gross Foreign Exchange Exposure (assets - liabilities)		(4,717,035)		(3,646,628)
Cash flow hedge accounting		3,863,589		3,931,879
Exchange rate swap CDI x Dollar		(132,598)		(67,000)
Exchange rate swap Real x Dollar		(115,000)		(115,000)
Net foreign exchange exposure		(1,101,044)		103,251

 

CSN uses Hedge Accounting strategy, as well as derivative financial instruments to protect future cash flows.

 

Sensitivity analysis of Derivative Financial Instruments and Consolidated Foreign Exchange Exposure

 

The Company considered scenarios 1 and 2 to be 25% and 50% deterioration for currency volatility, using the exchange rate closing rate as of March 31, 2024, as a reference.

 

The currencies used in the sensitivity analysis and their respective scenarios are shown below:

 

								03/31/2024
Currency		Exchange rate		Probable scenario		Scenario 1		Scenario 2
USD		4.9962		5.0887		6.2453		7.4943
EUR		5.3979		5.4739		6.7474		8.0969
USD x EUR		1.0804		1.0757		1.3505		1.6206

 

The effects on the result, considering scenarios 1 and 2, are shown below:

 

		03/31/2024
Instruments		Notional (million USD)		Risk		Probable scenario (*)		Scenario 1		Scenario 2
Gross exchange position		(4,717)		Dollar		(436)		(5,892)		(11,784)
Cash flow hedge accounting		3,864		Dollar		357		4,826		9,652
Exchange rate swap CDI x Dollar		(133)		Dollar		(12)		(166)		(332)
Exchange rate swap Real x Dollar		(115)		Dollar		(11)		(144)		(287)
Net exchange position		(1,101)		Dollar		(102)		(1,376)		(2,751)

 

(*) The probable scenarios were calculated considering the following variations for the risks: Real x Dollar - devaluation by 1.85% / Real x Euro - devaluation of the real by 1.41% / Euro x Dollar - appreciation of the dollar by 0.44%. Source: Central Bank of Brazil on May 08, 2024

 

·

Interest rate risk

 

This risk arises from financial investments, borrowings and financing and debentures linked to the fixed and floating interest rates of the CDI, TLP, SOFR, exposing these financial assets and liabilities to interest rate fluctuations as shown in the sensitivity analysis table below.

 

With the modification of the global financial market in recent years and in line with the recommendations of international regulatory bodies, the market began to transition from the Libor rate (London Interbank Offered Rate) to the SOFR (Secured Overnight Financing Rate) as of 2022. On March 31,2024,all contracts were migrated to SOFR, as evidenced in the interest rate sensitivity analysis.

 

Sensitivity analysis of changes in interest rates

 

We present below the sensitivity analysis for interest rate risks. The Company considered scenarios 1 and 2 to be 25% and 50% deterioration for interest rate volatility using the closing rate as of March 31, 2024, as a reference.

 

The interest rates used in the sensitivity analysis and their scenarios are shown below:

 

						Consolidated
						03/31/2024
Interest		Interest rate		Scenario 1		Scenario 2
CDI		10.65%		13.31%		15.98%
TJLP		6.53%		8.16%		9.80%
IPCA		4.62%		5.78%		6.93%
SOFR 6M		5.22%		6.52%		7.83%
SOFR		5.38%		6.73%		8.07%
EURIBOR 3M		3.89%		4.87%		5.84%
EURIBOR 6M		3.85%		4.81%		5.78%

 

The effects on balances in reais related to assets and liabilities linked to interest rates, considering scenarios 1 and 2, are shown below:

 

										Impact on balances on 03/31/2024
Changes in interest rates		% p.a		Assets		Liabilities		Probable scenario (*)		Scenario 1		Scenario 2
CDI		10.65%		(6,911,695)		2,469,985		(4,914,752)		(5,033,012)		(5,151,273)
TJLP		6.53%				77,766		82,844		84,114		85,383
IPCA		4.62%				7,739		8,097		8,186		8,275
SOFR 6M		5.22%				1,388,944		1,461,416		1,479,534		1,497,652
SOFR		5.38%				455,653		480,168		486,296		492,425
EURIBOR 3M		3.89%				363,658		377,812		381,350		384,889
EURIBOR 6M		3.85%				6,558		6,811		6,874		6,937

(*) The sensitivity analysis is based on the premise of maintaining the market values as of Marchr 31, 2024 as a probable scenario recorded in the company´s assets and liabilities.

 

·

Market price risk

 

The Company is also exposed to market risks related to the volatility of commodity and input prices. In line with its risk management policy, risk mitigation strategies involving commodities can be used to reduce cash flow volatility. These mitigation strategies may incorporate derivative instruments, predominantly forward transactions, futures, and options.

 

Below are the instruments for price risk protection, as shown in the following topics:

 

a) Cash flow hedge accounting - “Platts” index

 

The Company had derivative operations for iron ore, contracted by the subsidiary CSN Mineração, with the objective of reducing the volatility of its exposure to the commodity.

 

In order to better reflect the accounting effects of the Platts hedge strategy in the result, CSN Mineração opted to make the formal designation of the hedge and consequently adopted hedge accounting of the iron ore derivative as a hedge accounting instrument of its highly probable future iron ore sales. With this, the mark-to-market resulting from the volatility of Platts will be temporarily recorded in shareholders' equity and will be taken to the result when the referred sales occur according to the contracted period of assessment, thus allowing the recognition of the volatility of Platts on the sales of iron ore to be recognized at the same moment.

 

The table below shows the result of the derivative instrument until March 31, 2024:

 

				03/31/2024						03/31/2024		03/31/2023		03/31/2024		03/31/2023		03/31/2024		03/31/2023
				Appreciation (R$)				Fair value (market)		Other income and expenses (note 26)				Other comprehensive income				Exchange variation (note 27)
Maturity		Notional		Asset position		Liability position		Amounts receivable / (payable)
01/01/2023 to 09/30/2023 (Settled)		Platts										(568,027)				(198,005)				9,773
01/01/2024 to 01/31/2024 (Settled)		Platts								(202,702)								(719)
02/01/2024 to 02/28/2024 (Settled)		Platts								(39,977)								(133)
03/01/2024 to 03/31/2024 (*)		Platts		1,649,233		(1,395,446)		253,787		248,710								5,132
04/01/2024 to 04/30/2024		Platts		1,351,585		(1,050,251)		301,333						295,985				5,349
05/01/2024 to 05/31/2024		Platts		867,453		(668,417)		199,036						194,923				4,113
06/01/2024 to 06/30/2024		Platts		877,120		(664,370)		212,751						208,684				4,067
				4,745,391		(3,778,484)		966,907		6,031		(568,027)		699,592		(198,005)		17,808		9,773

(*) The operation matured on March 31, 2024 and was settled in early April 2024.

 

The changes in the amounts related to cash flow hedge accounting - Platts index recorded in shareholders' equity on March 31, 2024, are shown as follows:

 

	12/31/2023		Movement		Realization		03/31/2024
Cash flow hedge accounting  –  “Platts”	(672,280)		1,377,903		(6,031)		699,592
Income tax and social contribution on cash flow hedge accounting	228,575		(468,487)		2,051		(237,861)
Fair Value of cash flow accounting - Platts, net	(443,705)		909,416		(3,980)		461,731

 

The cash flow hedge accounting - Platts index – is fully effective since the derivative instruments were contracted.

 

To support the above-mentioned designations, the Company prepared formal documentation indicating how the designation of cash flow hedge accounting - Platts index is aligned with CSN's risk management objective and strategy, identifying the hedge instruments used, the hedge object, the nature of the risk to be protected and demonstrating the expectation of high effectiveness of the relations designated. Iron ore derivative instruments (“Platts” index) were designated in amounts equivalent to the portion of future sales, comparing the amounts designated with the amounts expected and approved in the Management and Board budgets.

 

Sensitivity analysis for Platts price risks

 

We present below the sensitivity analysis for Platts price risks. The Company considered scenarios 1 and 2 with 25% and 50% price devaluation using as a reference the probable price at the maturity of each operation.

 

The effects on the result, considering probable scenarios 1 and 2, are shown below:

 

 

		03/31/2024
Maturity		Probable scenario (*) R$		Scenario 1 R$		Scenario 2 R$
04/01/2024 to 04/30/2024		(52,489)		(306,953)		(561,417)
05/01/2024 to 05/31/2024		(25,617)		(228,346)		(431,074)
06/01/2024 to 06/30/2024		(2,694)		(74,810)		(146,925)
		(80,800)		(610,109)		(1,139,416)

(*) The probable scenario was calculated considering the Platts quotation on April 30,2024.

 

b) Cash flow hedge accounting

 

Foreign Exchange Hedge Accounting

 

The Company and its subsidiary CSN Mineração formally designates relations of hedge of cash flows to protect highly probable future flows exposed to the dollar related to sales made in dollars.

 

With the objective of better reflecting the accounting effects of the hedge exchange rate in the result, CSN and its subsidiary CSN Mineração designated part of their dollar liabilities as an instrument of future hedge exports. As a result, the exchange rate variation resulting from the designated liabilities will be temporarily recorded in shareholders’ equity and will be reflected in the income statement when said exports occur, thus allowing the recognition of dollar fluctuations on liabilities and on exports to be recorded at the same time. It is noteworthy that the adoption of this hedge accounting does not imply the contracting of any financial instrument.

 

The table below presents a summary of the relations of hedge as of March 31, 2024:

 

																		03/31/2024
Designation Date		Hedging Instrument		Hedged item		Type of hedged risk		Hedged period		Exchange rate on designation		Designated amounts (US$’000)		Amortizated part (USD'000)		Effect on Result (*) (R$'000)		Impact on Shareholders' equity (R$'000)
04/02/2018		Bonds		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		July 2018 - February 2023		3.3104		1,170,045		(1,170,045)
07/31/2019		Bonds and Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		January 2020 - April 2026		3.7649		1,342,761		(871,761)				(579,942)
01/10/2020		Bonds		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		March 2020 to November 2025 and December 2050		4.0745		1,416,000		(1,404,021)				(1,334,169)
01/28/2020		Bonds		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		March 2027 - January 2028		4.2064		1,000,000						(789,800)
06/01/2022		Bonds and Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		June 2022 - April 2032		4.7289		1,145,300		(151,300)		(3,969)		(265,696)
12/01/2022		Bonds		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		December 2022 - June 2031		5.0360		490,000		(37,000)				18,029
12/01/2022		Advance on foreign exchange contract		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		December 2022 - November 2023		5.1643		60,000		(60,000)
12/01/2022		Advance on foreign exchange contract		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		December 2022 - December 2025		5.2565		100,000						26,030
12/01/2022		Advance on foreign exchange contract		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		December 2022 - January 2024		5.2660		50,000		(50,000)		17,240
12/01/2022		Advance on foreign exchange contract		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		December 2022 - November 2023		5.3270		20,000		(20,000)
06/01/2022		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		June 2022 - May 2033		4.7289		878,640		(115,030)		(1,049)		(204,113)
12/01/2022		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		December 2022 - June 2027		5.0360		70,000						2,786
												7,742,746		(3,879,157)		12,222		(3,126,875)

 

(*) The realization of Hedge accounting cash flow is recognized in Other operating income and expenses, note 25.

 

The net balance of amounts designated and already amortized in dollars totals US$3.879.157.

 

In the hedging relationships described above, the amounts of the debt instruments were fully designated for equivalent iron ore export portions.

 

As of March 31, 2024, the hedging relationships established by the Company were effective according to the retrospective and prospective tests performed. Thus, no reversal for cash flow hedge accounting ineffectiveness was recognized.

 

c) Net investment hedge in foreign subsidiaries

 

The information related to the net investment hedge did not change in relation to that disclosed in the Company's interim financial information as of December 31, 2023. The balance recorded as of March 31, 2024 and December 31, 2023 is R$6,293.

 

d) Hedge accounting movements

 

The changes in the amounts related to cash flow hedge accounting recorded in shareholders’ equity as of March 31, 2024 are shown as follows:

 

							Consolidated
	12/31/2023		Movement		Realization		03/31/2024
Cash flow hedge accounting	(2,509,225)		(605,428)		(12,222)		(3,126,875)
Income tax and social contribution on cash flow hedge accounting	853,137		205,846		4,155		1,063,138
Fair Value of cash flow accounting, net taxes	(1,656,088)		(399,582)		(8,067)		(2,063,737)
							Parent Company
	12/31/2023		Movement		Realization		03/31/2024
Cash flow hedge accounting	(2,436,542)		(475,735)		(13,271)		(2,925,548)
Income tax and social contribution on cash flow hedge accounting	828,424		161,750		4,512		994,686
Fair Value of cash flow accounting, net taxes	(1,608,118)		(313,985)		(8,759)		(1,930,862)

 

·

Credit risk

 

The exposure to credit risks of financial institutions considers the parameters established in the financial policy. The Company practices a detailed analysis of the financial situation of its customers and suppliers, the determination of a credit limit and the permanent monitoring of its outstanding balance.

 

With regard to financial investments, the Company only invests in institutions with low credit risk assessed by credit rating agencies. Since part of the funds is invested in repo operations that are backed by Brazilian government bonds, there is also exposure to the credit risk of the country.

 

As for the exposure to credit risk in accounts receivable and other receivables, the Company has a credit risk committee, in which each new customer is analyzed individually regarding their financial condition, before granting the credit limit and payment terms, and periodically reviewed based on procedures and circumstances of each business area.

 

·

Liquidity risk

 

It is the risk that the Company may not have sufficient net funds to honor its financial commitments as a result of the mismatch of term or volume between expected receipts and payments.

 

Future receipt and payment premises are established to manage cash liquidity in domestic and foreign currencies, which are monitored on a day-to-day basis by the Treasury Department. The payment schedules for long-term installments of borrowings, financing and debentures are shown in note 12.b.

 

The following are the contractual maturities of financial liabilities including interest.

 

									Consolidated
On March 31, 2024	Less than one year		From one to two years		From two to five years		Over five years		Total
Borrowings, financing and debentures (note 12)	9,092,655		8,494,331		12,611,567		16,779,114		46,977,668
Lease Liabilities (note 14)	177,758		173,382		192,960		249,672		793,772
Derivative financial instruments (note 13 a)			47,844						47,844
Trade payables (note 15)	6,956,503		44,122		47,702		24,573		7,072,900
Trade payables – Drawee risk (note 15.a)	4,548,516								4,548,516
Dividends and interest on equity (note 16)	80,553								80,553
	20,855,985		8,759,679		12,852,229		17,053,359		59,521,253

 

 

IV - Fair values of assets and liabilities in relation to the book value

 

Financial assets and liabilities measured at fair value through profit or loss are recorded in current and non-current assets and liabilities and gains and losses are recorded as financial income and expenses, respectively.

 

The amounts are recorded in the interim financial information at their book values, which are substantially similar to those that would be obtained if they were traded on the market. The fair values of other long-term assets and liabilities do not differ significantly from their book values, except for the amounts below.

 

The estimated fair value for certain consolidated long-term borrowings and financing was calculated at current market rates, considering the nature, term and risks similar to those of the registered contracts, as follows:

 

			03/31/2024				12/31/2023
	Closing Balance		Fair value		Closing Balance		Fair value
Fixed Rate Notes (*)	17,987,789		16,566,986		15,030,441		12,825,475

(*) Source: Bloomberg

 

13.c)

Protection instruments: Derivatives

 

· Derivative financial instruments portfolio position

 

Swap exchange rate CDI x Dollar

 

In October 2023, the Company entered into a new swap agreement with the purpose of mitigating the risk associated with an External Credit Note (NCE) acquired during the same period, which is scheduled to mature in October 2028, and which has a principal amount of R$680 million.

 

Swap exchange rate Real x Dollar

 

The subsidiary CSN Cimentos Brasil, after contracting a borrowing in foreign currency of US$115,000, contracted derivative operations to protect its exposure to the dollar, maturing on June 10, 2027.

 

Swap exchange rate CDI x IPCA

 

The CSN Mineração, CSN Cimentos Brasil and CSN issued debentures during 2022 and 2023, respectively, and entered derivative transactions to hedge their exposure to the IPCA. CSN Mineração's contracts have maturities scheduled from 2031 to 2037, while CSN Cimentos' contracts mature in 2038 and CSN between 2030 and 2038

 

Below is the position of the derivatives:

 

																Consolidated
														03/31/2024		03/31/2023
								Appreciation (R$)				Fair value (market)		Impact on financial income (expenses) (note 26)
Instrument		Maturity		Functional Currency		Notional amount		Asset position		Liability position		Amounts receivable / (payable)
Exchange rate swap
Exchange rate swap CDI x Dollar		Settled		Dollar												18,893
Exchange rate swap Dollar x Euro		05/06/2024		Dollar		20,000						9,282		9,282
Exchange rate swap CDI x Dollar		10/04/2028		Real		680,000		767,965		(758,157)		9,808		(2,314)
Dollar vs. Real Swap		06/10/2027		Dollar		115,000		603,726		(651,570)		(47,844)		12,624		(40,172)
Total Swap						815,000		1,371,691		(1,409,727)		(28,754)		19,592		(21,279)
Interest rate swap
Foreign Exchange Swap (Debentures) CDI x IPCA		07/15/2031		Real		576,448		681,830		(627,558)		54,272		(22,003)		13,868
Foreign Exchange Swap (Debentures) CDI x IPCA		07/15/2032		Real		745,000		846,215		(809,333)		36,881		(24,961)		(2,226)
Foreign Exchange Swap (Debentures) CDI x IPCA		07/15/2036		Real		423,552		725,580		(697,807)		27,773		3,789		20,287
Foreign Exchange Swap (Debentures) CDI x IPCA		07/15/2037		Real		655,000		700,446		(703,724)		(3,278)		(34,458)		(18,089)
Foreign Exchange Swap (Debentures) CDI x IPCA		02/16/2032		Real		600,000		700,170		(638,384)		61,786		(17,493)		6,554
Foreign Exchange Swap (Debentures) CDI x IPCA		02/12/2032		Real		600,000		698,549		(652,249)		46,300		(25,594)		22,749
Foreign Exchange Swap (Debentures) CDI x IPCA		07/15/2030		Real		325,384		335,294		(341,009)		5,715		(8,558)
Foreign Exchange Swap (Debentures) CDI x IPCA		07/15/2033		Real		183,185		187,974		(192,169)		4,195		(5,969)
Foreign Exchange Swap (Debentures) CDI x IPCA		07/14/2028		Real		203,620		205,782		(209,197)		3,416		1,062
Total interest rate (Debentures) CDI x IPCA						4,312,189		5,081,839		(4,871,430)		237,060		(134,185)		43,143
								6,453,530		(6,281,157)		208,306		(114,593)		21,864

 

·

Classification of derivatives in the balance sheet and income statement

 

										03/31/2024		03/31/2023
Instruments		Assets				Liabilities				Financial income (expenses), net (note 26)
		Current		Total		Non-current		Total
Iron ore derivative		966,906		966,906
Exchange rate swap Dollar x Euro		9,282		9,282						9,282
Exchange rate swap CDI x Dollar		9,808		9,808						(2,314)		18,893
Exchange rate swap CDI x Dollar (1)						237,060		237,060		(134,185)		43,143
Dollar vs. Real Swap						(47,844)		(47,884)		12,624		(40,172)
		985,996		985,996		189,216		189,176		(114,593)		21,864

 

Derivative instruments SWAP CDI x IPCA are fully classified in the borrowings and financing group, since they are linked to debentures in order to protect exposure to the IPCA.

 

13.d)

Investments in securities measured at fair value through profit or loss

 

The Company has common shares (USIM3), preferred shares (USIM5) of Siderúrgica de Minas Gerais S.A. (“Usiminas”) and shares of Panatlântica S.A. (PATI3), which are designated as fair value through profit or loss, started to be recognized through the equity method, since there was an increase in participation, as described in Explanatory Note 10. Investments.

 

Usiminas shares are classified as current assets in financial investments and Panatlântica shares are classified as non-current assets under the investment line item. They are recorded at fair value, based on the market price quote in B3.

 

In accordance with the Company’s policy, the gains and losses arising from the variation in the share price are recorded directly in the income statement as financial result in the case of financial investments, or as other operating income and expenses in the case of long-term investments.

 

·

Stock market price risks

 

Class of shares		03/31/2024								12/31/2023								03/31/2024		03/31/2023
		Quantity		Equity interest (%)		Share price		Closing Balance		Quantity		Equity interest (%)		Share price		Closing Balance		Profit or loss (note 26)
USIM3		106,620,851		15.12%		9.37		999,037		106,620,851		15.12%		9.20		980,912		18,126		59,707
USIM5		55,144,456		10.07%		10.01		551,996		55,144,456		10.07%		9.29		512,292		39,704		7,169
								1,551,033								1,493,204		57,830		66,876

The Company is exposed to the risk of changes in the stock price due to the investments measured at fair value through profit or loss that have their quotations based on the market price on the B3.

 

Sensitivity analysis for stock price risks

 

We present below the sensitivity analysis for the stock price risks. The Company considered scenarios 1 and 2 with 25% and 50% devaluation in the stock price using as reference the closing price on March 31, 2024. The probable scenario considered a 5% devaluation in the stock price.

 

The effects on the result, considering probable scenarios, 1 and 2 are demonstrated below:

 

				03/31/2024
Class of shares		Probable scenario		Scenario 1		Scenario 2
		5%		25%		50%
USIM3		(49,952)		(249,759)		(499,519)
USIM5		(27,600)		(137,999)		(275,998)

 

 

13.e)

Capital management

 

The Company seeks to optimize its capital structure in order to reduce its financial costs and maximize the return to its shareholders. The table below shows the evolution of the Company’s consolidated capital structure, with financing by equity and third-party capital:

 

Thousands of reais		03/31/2024		12/31/2023
Shareholder's equity (equity)		19,758,908		19,684,838
Borrowings and Financing (Third-party capital)		46,388,307		44,859,075
Gross Debit/Shareholder's equity		2.35		2.28

 

 

14.   LEASE LIABILITIES

 

Lease liabilities are shown below:

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Leases	2,091,996		2,044,694		4,392		7,284
Present value adjustment - Leases	(1,298,224)		(1,310,933)		(146)		(285)
	793,772		733,761		4,246		6,999
Classified:
Current	177,758		137,638		4,094		6,523
Non-current	616,014		596,123		152		476
	793,772		733,761		4,246		6,999

 

The Company has lease agreements for port terminals in Itaguaí, the Solid Bulk Terminal - TECAR, used for loading and unloading iron ores and others and the Container Terminal - TECON, with remaining terms of 24 and 28 years, respectively, and lease agreement for railway operation using the Northeast network with a remaining term of 4 years and a lease agreement for land located in Taubaté, São Paulo, for the expansion of operations in the Steel segment with a remaining term of 19 years.

 

Additionally, the Company has operating equipment lease agreements, used mainly in the cements and steel operations, and real estate, used as operating facilities and administrative and sales offices, in several locations where the Company operates, with remaining terms of 1 to 19 years.

 

The present value of the future obligations was measured using the implicit rate observed in the contracts and for the contracts that did not have a rate, the Company applied the incremental borrowing rate - IBR, both in nominal terms.

 

The average incremental rate used in the measurement of lease liabilities and right of use in contracts entered into in the year ended March 31, 2024 is 12.75% p.a. for contracts with a term of 1 year.

 

The movement of lease liabilities is shown in the table below:

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Opening balance	733,761		693,846		6,999		13,180
New leases	207		189,855
Present Value Adjustments - New leases	(5)		(116,640)
Contract review	100,698		124,310		83		3,992
Write-off	(915)
Payments	(67,068)		(239,909)		(2,979)		(11,274)
Interest appropriated	23,871		82,521		144		1,101
Exchange variation	3,223		(222)
Net balance	793,772		733,761		4,247		6,999

 

 

The estimated future minimum payments for the lease agreements include determinable variable payments, which are certain to occur, based on minimum performance and contractually fixed rates.

 

As of March 31, 2024, the expected minimum payments are the following:

 

							Consolidated
	Less than one year		Between one and five years		Over five years		Total
Leases	187,752		492,783		1,411,461		2,091,996
Present value adjustment - Leases	(9,994)		(126,442)		(1,161,789)		(1,298,225)
	177,758		366,342		249,672		793,772

 

·

Recoverable PIS / COFINS

 

Lease liabilities were measured at the amount of consideration with suppliers, that is, without considering the tax credits incurred after payment. The potential right of PIS and COFINS embedded in the lease liability is shown below.

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Leases	1,748,241		1,755,060		4,125		7,039
Present value adjustment - Leases	(1,180,416)		(1,195,780)		(135)		(274)
Potencial PIS and COFINS credit	161,712		162,343		382		651
Present value adjustment – Potential PIS and COFINS credit	(109,188)		(110,610)		(12)		(25)

 

 

·

Lease payments not recognized as a liability:

 

The Company chose not to recognize lease liabilities in contracts with a term of less than 12 months and for low value assets. Payments made for these contracts are recognized as expenses when incurred.

 

The Company has contracts for the right to use ports (TECAR) and railways (FTL) which, even if they establish minimum performance, it is not possible to determine its cash flow since these payments are fully variable and will only be known when they occur. In such cases, payments will be recognized as expenses when incurred.

 

The expenses related to payments not included in the measurement of the lease liability during the period are:

 

							Parent Company
	Three months ended				Three months ended
	03/31/2024		03/31/2023		03/31/2024		03/31/2023
Contract less than 12 months	499		1,530
Lower Assets value	2,586		3,211		1,813		1,667
Variable lease payments	73,189		90,123
	76,274		94,864		1,813		1,667

 

 

In accordance with the guidelines of CPC 06(R2) / IFRS 16, the Company uses the discounted cash flow technique in the measurement and remeasurement of lease liabilities and right of use, without considering the projected inflation in the flows to be discounted.

 

15.   TRADE PAYABLES

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Trade payables	7,148,341		7,867,431		4,090,687		4,050,426
(-) Adjustment present value	(75,441)		(96,851)		(46,326)		(62,311)
	7,072,900		7,770,580		4,044,361		3,988,115
Classified:
Current	6,956,503		7,739,520		3,944,351		3,976,931
Non-current	116,397		31,060		100,010		11,184
	7,072,900		7,770,580		4,044,361		3,988,115

 

 

15.a)Suppliers

– Drawn Risk and Forfaiting

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
in Brazil	3,082,454		2,843,455		3,082,454		2,843,455
in Abroad	1,466,062		1,365,979		1,308,485		1,136,548
	4,548,516		4,209,434		4,390,939		3,980,003

 

The Company discloses and classifies its drawn-risk and forfaiting operations with suppliers in a specific group where the nature of the securities continue to be part of the Company's operating cycle. These transactions are negotiated with financial institutions to enable the Company's suppliers to anticipate receivables arising from sales of goods and, consequently, to extend the payment terms of the Company's own obligations. On March 31, 2024, it maintained a balance of R$4,548,516 in the Consolidated Ledger and on December 31, 2023, a balance of R$4,209,434. At the Parent Company, the balance was R$ 4,390,939 and R$ 3,980,003, respectively.

 

In response to the amendment of the accounting standard CPC 03 Statement of Cash Flows, additional information was presented below:

 

Trade payables	Risk Drawn and Forfaiting		No Risk Drawn or Forfaiting
Due between 1 and 180 days	2,703,505		2,924,889
Due between 181 to 360 days	1,845,012		941,275
Total	4,548,516		3,866,164

 

Impact of non-cash variations considering the 1st ITR of 2024:

 

Exchange variation	37,784
Interest Appropriation	102,659
Total	140,444

 

16.

OTHER PAYABLES

 

The other payables classified in current and non-current liabilities are comprised as follows:

 

 

							Consolidated								Parent Company
	Current				Non-current				Current				Non-current
	03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Payables to related parties (note 20.a)	27,446		29,651		18,346		38,058		349,389		336,486		4,341		4,176
Derivative financial instruments (note 13.a)			936,027		47,844		60,468
Dividends and interest on capital	80,553		80,624						5,159		5,230
Advances from customers (1)	2,015,273		2,063,509		4,668,253		5,144,623		332,914		277,764		657,408		709,495
Taxes in installments	61,369		75,735		137,113		154,089		16,061		15,908		55,731		56,325
Profit sharing - employees	337,472		260,109						173,665		133,996
Taxes payable					31,096		30,902						9,439		9,320
Provision for consumption and services	120,310		177,152						36,807		55,478
Third party materials in our possession	168,771		285,250						168,705		284,444
Trade payables (note 15)					116,397		31,060						100,010		11,184
Lease Liabilities (note 14)	177,758		137,638		616,014		596,123		4,094		6,523		152		476
Concessions payable					73,713		74,177
Other payables	397,113		39,231		240,959		308,992		2,807		6,904				57,841
	3,386,065		4,084,926		5,949,735		6,438,492		1,089,601		1,122,733		827,081		848,817

 

(1) Advances from Customers: On December 31, 2022 the subsidiaries CSN Mineração and CSN Cimentos entered into advance contracts for the sale of electricity with national operators in the sector to be executed up to 8 years. Additionally, the subsidiary CSN Mineração S.A. received in advance the total amount of US$500.000 (R$2,599,300) referring to supply contracts of approximately 13 million tons of iron ore signed with a major international player, to be executed within 4 years, with supply expected to begin in 2024. On June 30, 2023, the subsidiary CSN Mineração entered into an amendment to the advance contract, signed on January 16, 2023, in the amount of US$300,000 for additional supply of 6.3 million tons of iron ore. From this amendment, the Company received on June 30, 2023 the amount of US$205,000 (R$987,936), the remaining balance of US$95,000 will be received until July 31, 2023.

 

17.

INCOME TAX AND SOCIAL CONTRIBUTION

 

17.a) Income tax and social contribution recognized in profit or loss:

 

The income tax and social contribution recognized in net income for the period are as follows:

 

			Consolidated				Parent Company
	Three months ended				Three months ended
	03/31/2024		03/31/2023		03/31/2024		03/31/2023
Income tax and social contribution income (expense)
Current	(243,224)		(357,393)				(13,988)
Deferred	305,154		143,951		245,724		88,060
	61,930		(213,442)		245,724		74,072

 

The reconciliation of income tax and social contribution expenses and income of the consolidated and parent company and the product of the current tax rate on income before income tax and social contribution are shown below:

 

			Consolidated				Parent Company
	Three months ended				Three months ended
	03/31/2024		03/31/2023		03/31/2024		03/31/2023
Profit/(Loss) before income tax and social contribution	(541,592)		(609,106)		(835,425)		(1,000,468)
Tax rate	34%		34%		34%		34%
Income tax and social contribution at combined statutory rate	184,141		207,096		284,045		340,159
Equity in results of affiliated companies	43,333		24,519		(37,364)		78,097
Difference Tax Rate in companies abroad	(147,492)		(74,582)
Transfer Price Adjustment and Profits Abroad			5,167
Indebtdness limit	3,123				3,123
Tax incentives	6,234
Recognition/(reversal) of tax credits	(28,467)		(364,833)				(341,302)
Other permanent deductions (additions)	1,058		(10,809)		(4,080)		(2,882)
Income tax and social contribution in net income for the year	61,930		(213,442)		245,724		74,072
Effective tax rate	11%		-35%		29%		7%

 

17.b)

Deferred income tax and social contribution:

 

Deferred income tax and social contribution balances are as follows:

 

				Consolidated				Parent Company
		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Deferred
Income tax losses		3,896,340		4,198,734		2,375,926		2,170,442
Social contribution tax losses		1,333,631		1,441,925		877,629		803,655
Temporary differences		(425,661)		(911,027)		371,837		239,313
Tax, social security, labor, civil and environmental provisions		540,317		550,567		174,446		180,963
Estimated losses on assets		249,709		238,211		163,747		165,218
Gains/(Losses) on financial assets		375,442		328,678		329,936		349,121
Actuarial Liabilities (Pension and Health Plan)		182,872		171,816		167,214		163,580
Provision for consumption and services		14,277		22,346		13,994		20,579
Cash Flow Hedge Accounting and Unrealized Exchange Variations		268,584		509,386		408,743		260,216
(Gain) on loss of control of Transnordestina		(224,096)		(224,096)		(224,096)		(224,096)
Fair Value SWT/CBL Acquisition		(149,489)		(149,489)
Business combination		(1,466,876)		(1,473,119)		(721,992)		(721,992)
Others		(216,401)		(885,327)		59,845		45,724
Total		4,804,310		4,729,632		3,625,392		3,213,410
Total Deferred Assets		5,514,339		5,991,213		3,625,392		3,213,410
Total Deferred Liabilities		(710,029)		(1,261,581)
Total		4,804,310		4,729,632		3,625,392		3,213,410

 

The Company has in its corporate structure subsidiaries abroad, whose income is taxed by the income tax in the respective countries where they were constituted at rates lower than those in force in Brazil. In the period between 2018 and 2023, these subsidiaries generated income in the amount of R$155,482. If the Brazilian tax authorities understand that this income is subject to additional taxation in Brazil for income tax and social contribution, these, if due, would reach approximately R$52,864. The Company, based on the position of its legal advisors, assessed only the likelihood of loss as possible in the event of possible tax questioning and, therefore, no provision was recognized in the interim financial information.

 

In addition, management evaluated the precepts of IFRIC 23 - “Uncertainty Over Income Tax Treatments” and recognized in 2021 the credit for the unconstitutionality of the levy of the IRPJ and CSLL on the amounts of default interest referring to the SELIC rate received due to the repetition of tax undue payment.

 

17.c)

Changes in deferred income tax and social contribution

 

The changes in deferred taxes is shown below:

 

		Consolidated		Parent Company
		03/31/2024		03/31/2024
Balance as of January 01, 2023		4,878,768		3,256,712
Recognized in the result		403,542		517,768
Recognized in other comprehensive income		(559,050)		(560,624)
Use of tax credit in installment program		(445)		(446)
Reverse incorporation		6,818
Balance at December 31, 2023		4,729,633		3,213,410
Recognized in the result		305,154		245,724
Recognized in other comprehensive income		(257,388)		166,258
Corporate incorporation		26,911
Balance at March 31, 2024		4,804,310		3,625,392

 

17.d)

Income tax and social contribution recognized in equity:

 

The income tax and social contribution recognized directly in equity are shown below:

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Income tax and social contribution
Actuarial gains on defined benefit pension plan	84,065		83,436		77,840		77,840
Exchange differences on translating foreign operations	(325,350)		(325,350)		(325,350)		(325,350)
Cash flow hedge accounting	859,574		1,030,432		994,686		828,425
	618,289		788,518		747,176		580,915

 

 

18.

PROVISIONS FOR TAX, SOCIAL SECURITY, LABOR, CIVIL AND ENVIRONMENTAL RISKS AND JUDICIAL DEPOSITS

 

Claims of different nature are being challenged at the appropriate courts. Details of the accrued amounts and related judicial deposits are as follows:

 

								Consolidated								Parent Company
		Accrued liabilities				Judicial deposits				Accrued liabilities				Judicial deposits
		03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Tax		156,577		154,626		153,524		153,715		19,137		21,378		60,928		61,231
Social security		1,633		1,609				4		1,632		1,609
Labor		361,873		366,645		291,823		288,389		149,014		153,048		129,274		133,676
Civil		795,217		778,796		23,364		24,880		146,956		139,517		13,602		14,784
Environmental		41,951		41,194		3,476		3,340		11,699		11,856		1,142		1,142
Deposit of a guarantee						22,324		21,554
		1,357,251		1,342,870		494,511		491,882		328,438		327,408		204,946		210,833
Classified:
Current		36,997		36,000						17,078		15,228
Non-current		1,320,254		1,306,870		494,511		491,882		311,360		312,180		204,946		210,833
		1,357,251		1,342,870		494,511		491,882		328,438		327,408		204,946		210,833

 

The changes in tax, social security, labor, civil and environmental provisions in the year ended March 31, 2024 can be summarized as follows:

 

										Consolidated
										Current + Non-current
Nature		12/31/2023		Additions		Accrued charges		Net utilization of reversal		03/31/2024
Tax		154,626		4,564		2,786		(5,399)		156,577
Social security		1,609		3		21				1,633
Labor		366,645		14,491		11,779		(31,042)		361,873
Civil		778,796		934		20,601		(5,114)		795,217
Environmental		41,194		449		681		(373)		41,951
		1,342,870		20,441		35,868		(41,928)		1,357,251

 

										Parent Company
										Current + Non-current
Nature		12/31/2023		Additions		Accrued charges		Net utilization of reversal		03/31/2024
Tax		21,378		542		228		(3,013)		19,135
Social security		1,609		3		21				1,633
Labor		153,048		2,747		4,955		(11,736)		149,014
Civil		139,517		369		7,543		(473)		146,956
Environmental		11,856		5		36		(197)		11,700
		327,408		3,666		12,783		(15,419)		328,438

 

The provision for tax, social security, labor, civil and environmental risks was estimated by Management and is mainly based on the legal advisors’ assessment. Only lawsuits for which the risk is classified as probable loss are provisioned. Additionally, tax liabilities from actions initiated by the Company is included in this provision and is subject to SELIC (Central Bank’s policy rate).

 

§

Possible administrative and judicial proceedings

 

The Company does not make provisions for lawsuits, which Management’s expectations, based on the opinion of legal counsel, is a possible loss. The following table shows a summary of the balance of the main matters classified as possible risk compared to the balance as of March 31, 2024 and December 31, 2023.

 

				Consolidated
		03/31/2024		12/31/2023
Notice of Violation and Imposition of Fine (AIIM) / Tax Foreclosure - RFB - IRPJ/CSLL - Capital Gain for alleged sale of equity interest in subsidiary NAMISA		15,878,441		15,606,600
Notice of Violation and Imposition of Fine (AIIM) / Tax Foreclosure - RFB - IRPJ/CSLL - Disallowance of goodwill deductions generated in the reverse incorporation of Big Jump by Namisa		5,543,966		5,443,666
Notice of Violation and Imposition of Fine (AIIM) / Tax Enforcement - RFB - IRPJ/CSLL - Disallowance of prepayment interest arising from iron ore supply and port services contracts		2,169,433		2,124,479
Notices of Infraction and Imposition of Fine (AIIM) / Writ of Mandamus - RFB - IRPJ/CSLL - Profits earned abroad in the years 2008, 2010, 2011, 2012, 2014, 2015, 2016, 2017 and 2018		5,944,670		5,828,921
Unapproved compensation - RFB - IRPJ/CSLL, PIS/COFINS and IPI		2,059,861		2,052,564
ICMS - SEFAZ/RJ - Assessment Notice -  questions about sales for incentive area		1,030,430		1,016,381
Notice of Violation and Imposition of Fine (AIIM) - RFB - Disallowance of PIS/COFINS Credits for inputs and freight		1,417,385		1,388,918
CFEM – difference of understanding between CSN and ANM on the calculation basis		1,485,517		1,452,933
Notice of Infraction and Imposition of Fine (AIIM) - RFB - Collection IRRF - Business Combinations CMIN 2015		1,129,078		1,106,401
ICMS - SEFAZ/RJ - ICMS Credits Acquisition of Electric Energy Industrialization		1,087,713		1,065,918
Notice of Violation and Imposition of Fine (AIIM) - IRPJ/CSLL - Disallowance of deductions of goodwill generated in the acquisition of Cimentos Mauá		829,554		810,907
ICMS - SEFAZ/RJ  - Disallowance of the ICMS credits - Transfer of iron ore		743,681		731,416
ICMS - SEFAZ/RJ - Disallowance of credits on purchases of intermediate products		456,630		445,682
Disallowance of tax loss and negative calculation base resulting from adjustments in SAPLI - RFB		755,763		741,056
Infraction and Fine Imposition Notices (AIIM) - RFB - IRPJ/CSLL - Transfer Pricing		369,957		363,043
ICMS - SEFAZ/RJ - Transfer of imported raw material for a value lower than the TECAR import document		402,053		394,865
Notice of Violation and Imposition of Fine (AIIM) / Annulment Action - RFB - IRRF - Capital gain of CFM company sellers located abroad		322,860		317,522
Other tax lawsuits (federal, state, and municipal)		6,089,885		6,282,247
Social security lawsuits		605,148		288,973
Action to discuss the balance of the construction contract – Tebas		621,724		593,716
Action related to power supply payment’s charge - Light		468,703		440,002
Action that discusses Negotiation of energy sales - COPEN - CEEE-G		205,504		201,123
Collection of defaulted amounts of contracts for the execution of the Presidente Médici Thermoelectric Power Plant - SACE - CEEE-G		210,996		205,262
Enforcement action applied by Brazilian antitrust authorities (CADE)		124,591		122,136
Other civil lawsuits		1,540,775		1,423,591
Labor and social security lawsuits		2,192,230		2,091,666
Tax Foreclosure Volta Grande Fine IV		146,202		137,668
ACP Márcia I Landfill		306,389		306,389
Other environmental lawsuits		706,597		667,901
		54,845,736		53,651,946

 

In the first quarter of 2021, the Company was notified of an arbitration proceeding based on an alleged unfulfillment of iron ore supply contracts. The counterparty asks for approximately US$1 billion, and the Company has no knowledge of the basis for the estimates of the amount asked. Finally, the Company informs that has responded the arbitration requirements in conjunction with its legal counselors and is currently at the initial stage of its defense. The Company expects the arbitration will be concluded in 2 years. The relevance of the arbitration to the Company is related to the amount attributed to the cause and its eventual financial impact. The discussion involves arbitration disputes initiated by both parties.

 

The Company has been offering judicial guarantees (Guarantee Insurance/Letter of Guarantee) in the total amount updated to March 31, 2024, of R$9,021,041 (December 31, 2023, R$8,768,003), as determined by the procedural legislation in force.

 

The assessments made by legal advisors define these administrative and judicial proceedings as a possible risk of loss and, consequently, no loss provisions have been recognized in accordance with Management's judgment and with the accounting practices adopted in Brazil.

 

19.

PROVISION FOR ENVIRONMENTAL LIABILITIES AND ASSET RETIREMENT OBLIGATIONS

 

The balance of provisions for environmental liabilities and asset retirement obligation is as follows:

 

			Consolidated				Parent Company
	03/31/2024		12/31/2023		03/31/2024		12/31/2023
Environmental liabilities	171,460		176,181		157,327		160,968
Asset retirement obligations	877,914		842,624
	1,049,374		1,018,805		157,327		160,968

 

20.

RELATED-PARTY BALANCES AND TRANSACTIONS

 

20.a)

Transactions with subsidiaries, jointly controlled entities, associates, exclusive funds and other related parties

 

·

Consolidated

 

		Consolidated
		03/31/2024								12/31/2023
		Associates		Joint-ventures and Joint Operation		Other related parties		Total		Associates		Joint-ventures and Joint Operation		Other related parties		Total
Assets
Current Assets
Investments	(1)					2,217,584		2,217,584						2,128,183		2,128,183
Trade receivables (note 5)	(2)	38,793		4,166		57,660		100,619		34,441		2,658		131,268		168,367
Dividends	(3)			106,867		74,050		180,917				106,747				106,747
Loans (note 8)	(4)			5,287				5,287				5,316				5,316
Other assets (note 8)				6,480		1,829		8,309				6,480		1,829		8,309
		38,793		122,800		2,351,123		2,512,716		34,441		121,201		2,261,280		2,416,922
Non-current Assets
Investments	(1)					114,912		114,912						111,350		111,350
Loans (note 8)	(4)	3,747		1,715,630				1,719,377		3,732		1,655,680				1,659,412
Actuarial asset						40,351		40,351						39,530		39,530
Other assets (note 8)	(5)			1,792,579				1,792,579				1,792,579				1,792,579
		3,747		3,508,209		155,263		3,667,219		3,732		3,448,259		150,880		3,602,871
		42,540		3,631,009		2,506,386		6,179,935		38,173		3,569,460		2,412,160		6,019,793
Liabilities
Current Liabilities
Trade payables				79,210		23,166		102,376				140,579		35,435		176,014
Accounts payable				19,880				19,880		46		22,378				22,424
Provision for consumption				7,567				7,567				7,227				7,227
				106,657		23,166		129,823		46		170,184		35,435		205,665
Non-current Liabilities
Accounts payable				18,347				18,347				38,058				38,058
				18,347				18,347				38,058				38,058
				125,004		23,166		148,170		46		208,242		35,435		243,723

 

		Consolidated
		03/31/2024								03/31/2023
		Associates		Joint-ventures and Joint Operation		Other related parties		Total		Associates		Joint-ventures and Joint Operation		Other related parties		Total
P&L
Sales		49,198		4,830		466,133		520,161		61,987		3,892		353,513		419,392
Cost and expenses		(151)		(482,434)		(83,440)		(566,025)		(51)		(377,377)		(58,604)		(436,032)
Financial income (expenses)
Interest (note 26)				37,984		13,378		51,362				42,949		9,418		52,367
Exchange rate variations and  monetary, net														(17,953)		(17,953)
Financial investments	(1)					57,830		57,830						66,876		66,876
		49,047		(439,620)		453,901		63,328		61,936		(330,536)		353,250		84,650

 

 

·

Parent Company

 

		Parent Company
		03/31/2024								12/31/2023
		Subsidiaries and associates		Joint-ventures and Joint Operation		Other related parties and exclusive funds		Total		Subsidiaries and associates		Joint-ventures and Joint Operation		Other related parties and exclusive funds		Total
Assets
Current Assets
Investments	(1)					1,636,740		1,636,740						1,575,262		1,575,262
Trade receivables (note 5)	(2)	1,066,907		744		56,753		1,124,404		955,246				130,837		1,086,083
Loans (note 8)	(4)			5,287				5,287				5,316				5,316
Dividends	(3)	507,504		71,823				579,327		507,502		55,436				562,938
Other assets (note 8)		359,408		2		1,829		361,239		215,320		2		1,829		217,151
		1,933,819		77,856		1,695,322		3,706,997		1,678,068		60,754		1,707,928		3,446,750
Non-current Assets
Investments						114,912		114,912						111,350		111,350
Loans (note 8)	(4)	593,185		1,615,960				2,209,145		539,523		1,557,013				2,096,536
Actuarial asset (note 8)						31,706		31,706						31,007		31,007
Other assets (note 8)	(5)	8		1,792,579				1,792,587		8		1,792,574				1,792,582
		593,193		3,408,539		146,618		4,148,350		539,531		3,349,587		142,357		4,031,475
		2,527,012		3,486,395		1,841,940		7,855,347		2,217,599		3,410,341		1,850,285		7,478,225
Liabilities
Current Liabilities
Intercompany Loans (note 12)	(6)	1,374,908						1,374,908		1,521,537						1,521,537
Trade payables		499,808		33,048		22,549		555,405		388,995		49,778		34,462		473,235
Accounts payable		3,050						3,050		11,538						11,538
Provision for consumption		338,772		7,567				346,339		317,721		7,227				324,948
		2,216,538		40,615		22,549		2,279,702		2,239,791		57,005		34,462		2,331,258
Non-current Liabilities
Intercompany Loans (note 12)	(6)	10,243,627						10,243,627		7,501,145						7,501,145
Accounts payable		4,341						4,341		4,176						4,176
		10,247,968						10,247,968		7,505,321						7,505,321
		12,464,506		40,615		22,549		12,527,670		9,745,112		57,005		34,462		9,836,579

 

		Parent Company
		03/31/2024								03/31/2023
		Subsidiaries and associates		Joint-ventures and Joint Operation		Other related parties and exclusive funds		Total		Subsidiaries and associates		Joint-ventures and Joint Operation		Other related parties and exclusive funds		Total
Net revenue and cost
Sales		842,788		744		462,293		1,305,825		1,195,030				353,476		1,548,506
Cost and expenses		(388,778)		(142,362)		(70,446)		(601,586)		(695,228)		(103,448)		(71,637)		(870,313)
Financial income (expenses)
Interest (note 26)		(29,024)		37,055		2,814		10,845		(45,725)		42,212		9,327		5,814
Exclusive funds (note 26)						1,997		1,997						5,307		5,307
Financial investments (note 26)						57,830		57,830						66,876		66,876
Financial investments (note 25)		(284,782)						(284,782)		227,439				(3,158)		224,281
		140,204		(104,563)		454,488		490,129		681,516		(61,236)		360,191		980,471

 

Consolidated and Parent Company Information:

 

(1)

Financial investments: Refers mainly to investments in Usiminas shares, cash and cash equivalents and Bonds with Banco Fibra and government bonds and CDBs with the exclusive funds.

 

(2)

Accounts receivables: refers mainly to sales transactions of steel products from the Parent Company to related parties.

 

(3)

Dividends receivable: In the Parent Company on September 30, 2023, it mainly refers to interest on equity from CSN Mineração S.A in the amount of R$ 295.058 and dividends from the subsidiary CSN Cimentos Brasil S.A in the amount of R$178,348.and in the Consolidated dividends from MRS Logística S.A in the amount of R$106.747.

 

(4)

Loans (Assets):

 

Long-term: In the Consolidated Index refers mainly to loan agreements with Transnordestina Logística R$1,707,510 (R$1,646,264 as of December 31, 2023) with an average rate of 125.0% to 130.0% of the CDI.

 

(5)

Other (Assets): In the Consolidated Advance for future capital increase with Transnordestina Logística S.A.de R$1,792,579 as of March 31, 2024 (R$1,792,579 as of December 31, 2023)

 

(6)

Borrowings (Liabilities):

 

Foreign currency: At the Parent Company, these are intercompany contracts in the amount of R$ 11,618,535 as of March 31 of 2024 (R$ 9,022,682 on December 31, 2023).

 

20.b)

Key management personnel

 

The key management personnel with authority and responsibility for planning, directing, and controlling the Company’s activities include members of the Board of Directors and statutory officers. The following is information on the compensation of such personnel and the related balances as of March 31, 2024, and 2023.

 

		03/31/2024		03/31/2023
		P&L
Benefits to Administrators, Directors and Executive Board		7,265		7,395
Post-employment benefits		133		102
		7,398		7,497

 

 

20.c)

Guarantees

 

The Company is liable for guarantees of its subsidiaries and jointly controlled entities as follows:

 

	Currency		Salaries		Loans				Tax enforcement				Other				Total
					03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023		03/31/2024		12/31/2023
Transnordestina Logísitca	R$		Until 09/19/2056 and Undetermined		3,709,250		3,695,183		10,290		10,029		4,443		4,235		3,723,983		3,709,447
Group Subsidiaries	R$		Undetermined and until 12/21/2024		1,903,235		1,903,235						131,920		131,920		2,035,155		2,035,155
Total in R$					5,612,485		5,598,418		10,290		10,029		136,363		136,155		5,759,138		5,744,602
CSN Inova Ventures	US$		01/28/2028		1,300,000		1,300,000										1,300,000		1,300,000
CSN Resources	US$		Until 04/08/2032		2,232,988		1,530,000										2,232,988		1,530,000
CSN Cimentos	US$		Indeterminate				115,000												115,000
Total in US$					3,532,988		2,945,000										3,532,988		2,945,000
Lusosider Aços Planos	EUR		Indeterminate										75,000		75,000		75,000		75,000
Total in EUR													75,000		75,000		75,000		75,000
Total in R$					17,651,515		14,257,629						404,843		401,370		18,056,357		14,658,999
					23,264,000		19,856,047		10,290		10,029		541,206		537,525		23,815,495		20,403,601

 

21.

SHAREHOLDERS’ EQUITY

 

21.a)

Paid-up capital

 

The fully subscribed and paid-up capital as of March 31, 2024, is R$10,240,000, divided into 1,326,093,947 common and book-entry shares (as of December 31, 2023, R$10,240,000 divided into 1, 326,093,947 common and book-entry shares), with no par value. Each common share entitles to one vote in the resolutions of the General Meeting.

 

21.b)

Authorized capital

 

The Company’s bylaws in effect on March 31, 2023, define that the share capital may be increased to up to 2,400,000,000 shares, by decision of the Board of Directors, regardless of amendments to the bylaws.

 

 

21.c)

Legal reserve

 

It is constituted at the rate of 5% of the net income calculated in each fiscal year, before any other allocation, pursuant to art. 193 of Law 6,404/86, up to a limit of 20% of the capital stock.

 

21.d)

Ownership structure

 

As of March 31, 2024, and December 31, 2023, the Company’s ownership structure was as follows:

 

						03/31/2024						12/31/2023
		Number of common shares		% of total shares		% of voting capital		Number of common shares		% of total shares		% of voting capital
Vicunha Aços S.A. (*)		543,617,803		40.99%		40.99%		543,617,803		40.99%		40.99%
Rio Iaco Participações S.A. (*)		45,706,242		3.45%		3.45%		45,706,242		3.45%		3.45%
CFL Ana Participações S.A. (*)		135,904,451		10.25%		10.25%		135,904,451		10.25%		10.25%
NYSE (ADRs)		271,398,416		20.47%		20.47%		273,702,845		20.64%		20.64%
Other shareholders		329,467,035		24.84%		24.84%		327,162,606		24.67%		24.67%
Outstanding shares		1,326,093,947		100.00%		100.00%		1,326,093,947		100.00%		100.00%

 

As of March 31, 2023, an Asset Restructuring Agreement was entered into between Rio Purus Participações S.A. and CFL Participações S.A. ("CFL"), the shareholders that directly and indirectly hold all the shares of Vicunha Aços S.A. ("Vicunha Aços"). Thus, the implementation of this Transaction results in CFL Ana Participações S.A. ("CFL Ana"), a subsidiary of CFL, holding 135,904,451 common shares, book-entry and without par value issued by CSN, representing on this date 10.25% of its capital stock.

 

(*) Companies in the controlling group.

 

21.e)

Treasury shares

 

On March 31, 2024 , the Company did not have an open treasury share buyback program, below is the movement of the programs that were closed:

 

Program

Board’s Authorization

Authorized quantity

Program period

Average buyback price

Minimum and maximum buyback price

Number bought back

Share cancelation

Sale of shares

Balance in treasury

04/20/2018

30,391,000

From 4/20/2018 to 4/30/2018

Not applicable

Not applicable

22,981,500

7,409,500

1º

06/21/2021

24,154,500

From 06/22/2021 to 12/22/2021

R$ 21.82

R$20.06 and R$23.22

24,082,000

31,491,500

2º

12/06/2021

30,000,000

From 12/07/2021 to 6/30/2022

R$ 25.00

R$17.20 and R$26.76

29,938,600

61,430,100

05/18/2022

Not applicable

Not applicable

61,430,100

3º

05/18/2022

58,000,000

From 05/19/2022 to 05/18/2023

 

 

 

21.f) Earnings per share

 

The earnings per share are shown below:

 

	Three months ended
	03/31/2024		03/31/2023
	Common Shares
(Loss)/profit for the year	(589,701)		(926,396)
Weighted average number of shares	1,326,093,947		1,326,093,947
Basic and diluted (loss)/earnings per share in R$	(0.44469)		(0.69859)

 

 

22.

COMPENSATION TO SHAREHOLDERS

 

On May 03, 2023, was approved at the Annual General Meeting, based on the position of the shareholders on April 28, 2023, the distribution of additional dividends proposed in the amount of R$ 1,614,000, corresponding to the amount of R$1.21710833810 per share.

 

23.

NET REVENUE FROM SALES

 

Net sales revenue is comprised as follows:

 

								Parent Company
		03/31/2024		03/31/2023		03/31/2024		03/31/2023
Gross revenue
Domestic market		6,489,488		6,709,992		4,734,137		4,883,831
Foreign market		4,800,143		6,172,300		510,475		595,957
		11,289,631		12,882,292		5,244,612		5,479,788
Deductions
Sales returns, discounts and rebates		(230,945)		(120,546)		(166,918)		(101,987)
Taxes on sales		(1,345,694)		(1,443,056)		(869,910)		(907,734)
		(1,576,639)		(1,563,602)		(1,036,828)		(1,009,721)
Net revenue		9,712,992		11,318,690		4,207,784		4,470,067

 

 

24.

EXPENSES BY NATURE

 

								Parent Company
		03/31/2024		03/31/2023		03/31/2024		03/31/2023
Raw materials and inputs		(3,395,876)		(3,082,974)		(2,531,160)		(2,536,554)
Outsourcing material		(765,963)		(1,227,283)
Labor cost		(1,148,790)		(945,391)		(443,082)		(367,886)
Supplies		(607,551)		(932,240)		(534,617)		(652,143)
Maintenance cost (services and materials)		(192,806)		(100,047)		(61,993)		(51,522)
Outsourcing services		(461,467)		(771,987)		(269,234)		(272,560)
Freight		(1,230,664)		(993,444)		(208,357)		(194,576)
Depreciation, amortization and depletion		(875,064)		(781,276)		(316,232)		(272,459)
Others		(249,204)		(259,228)		(26,537)		(8,657)
		(8,927,385)		(9,093,870)		(4,391,212)		(4,356,357)
Classified as:
Cost of sales		(7,521,968)		(8,073,476)		(4,100,294)		(4,090,964)
Selling expenses		(1,198,564)		(860,513)		(202,888)		(211,489)
General and administrative expenses		(206,853)		(159,881)		(88,030)		(53,904)
		(8,927,385)		(9,093,870)		(4,391,212)		(4,356,357)

 

 

The depreciation, amortization and depletion for the period were distributed as follows.

 

			Consolidated				Parent Company
	03/31/2024		03/31/2023		03/31/2024		03/31/2023
Production costs (1)	(858,072)		(770,910)		(308,799)		(267,515)
Selling expenses	(11,867)		(3,836)		(2,770)		(2,153)
General and administrative expenses	(5,125)		(6,530)		(4,663)		(2,791)
	(875,064)		(781,276)		(316,232)		(272,459)
Other operational (2)	(20,838)		(19,902)		(2,252)		(1,771)
	(895,902)		(801,178)		(318,484)		(274,230)

 

(1) The cost of production includes PIS and COFINS credits on lease agreements as of Marchr 31, 2024, in the amount of R$858 in the consolidated (R$1,824as of March 31, 2024) and R$226 in the parent company (R$163) as of March 31, 2023).

 

(2) They mainly refer to the depreciation of investment properties, paralyzed equipment and amortization of the SWT customer portfolio, classified in other operating expenses, see note 25.

 

25.

OTHER OPERATING INCOME AND EXPENSES

 

				Consolidated				Parent Company
		03/31/2024		03/31/2023		03/31/2024		03/31/2023
Other operating income
Receivables by indemnity		38,825		3,955		38,458		3,751
Rentals and leases		7,008		3,527		5,022		1,302
Contractual fines		9,817		950		9,775		658
Updated shares – Fair value through profit or loss (Note 13)				42,210				42,210
Net gain in shares sale (note 13) (3)		18,253				13,271
Other revenues		22,564		44,087		13,734		26
		96,467		94,729		80,260		47,947
Other operating expenses
Taxes and fees		(37,113)		(31,399)		(15,349)		(18,524)
Expenses/reversal with environmental liabilities, net		(13,403)		(3,119)		980		(1,528)
Write-off/(Provision) of judicial lawsuits		(37,820)		(81,214)		(14,892)		(43,383)
Depreciation and amortization (note 24)		(20,838)		(19,902)		(2,252)		(1,771)
Write-off of PPE and intangible assets (notes 10 and 11)		(9,870)		2,176		(2,216)		1,902
Estimated (Loss)/reversal in inventories (1)		(46,612)		(404,373)		(24,232)		(156,013)
Idleness in stocks and paralyzed equipment (2)		(52,752)		(144,193)		(47,251)		(144,193)
Studies and project engineering expenses		(9,400)		(8,940)		(2,382)		(3,680)
Healthcare plan expenses		(25,821)		(26,705)		(25,345)		(26,382)
Cash flow hedge accounting realized  (nota 13) (3)				(930,523)				(353,203)
Actual pension plan		(11,437)				(10,687)
Other expenses		(127,394)		(112,345)		(85,000)		(43,710)
		(392,460)		(1,760,537)		(228,627)		(790,485)
Other operating income (expenses), net		(295,992)		(1,665,808)		(148,366)		(742,538)

 

(1)

Refers substantially to losses incurred in the production process at the Presidente Vargas Plant ("UPV") and losses in inventories.

(2)

Operational idleness due to interventions in the sintering process that impacted crude steel production.

(3)

In the Parent Company, it is the realization of a Cash Flow Hedge in the amount of R$13,271 and in the Consolidated Sector, the realization of a Hedging of Cash flow of R$12,222 and Platts Hedge of R$6,031.

 

26.

FINANCIAL INCOME (EXPENSES)

 

				Consolidated				Parent Company
		03/31/2024		03/31/2023		03/31/2024		03/31/2023
Financial income
Related parties (Note 20 a)		52,833		54,429		57,966		72,415
Income from financial investments		211,058		194,545		33,989		30,557
Updated shares – Fair value through profit or loss (Note 13.d)		57,830		66,876		57,830		66,876
Interest and fines		13,594		23,888		8,449
Other income		99,044		5,081		95,267		20,476
		434,359		344,819		253,501		190,324
Financial expenses
Borrowings and financing - foreign currency (note 12)		(480,099)		(302,226)		(69,460)		(36,556)
Borrowings and financing - local currency (note 12)		(482,077)		(502,789)		(308,661)		(283,461)
Capitalised interest (note 10)		37,680		44,198		15,104		17,505
Related parties (Note 20 a)		(1,471)		(2,062)		(45,124)		(61,294)
Lease liabilities		(10,457)		(17,271)		(2,483)		(256)
Interest and fines		(115,364)		(100,896)		(114,184)		(85,203)
Interest on drawn/forfaiting risk operations		(22,352)		(138,363)		(100)		(138,363)
(-) Adjustment present value of trade payables		(91,783)		(80,996)		(60,930)		(62,370)
Commission, bank fees, Guarantee and bank fees		(47,465)		(45,032)		(25,041)		(21,284)
PIS/COFINS over financial income		(37,188)		(18,290)		(16,081)		(3,574)
Other financial expenses		(168,051)		(123,421)		(5,839)		(29,874)
		(1,418,627)		(1,287,148)		(632,799)		(704,730)
Others financial items, net
Foreign exchange and monetary variation, net		(25,666)		(269,162)		1,341		(46,760)
Gains and (losses) on exchange derivatives (*)		(114,593)		21,864		(15,780)		(40,172)
		(140,259)		(247,298)		(14,439)		(86,932)
		(1,558,886)		(1,534,446)		(647,238)		(791,662)
Financial income (expenses), net		(1,124,527)		(1,189,627)		(393,737)		(601,338)
(*) Statement of gains and (losses) on derivative transactions (note 13.c)
Dollar - to - real NDF
Exchange rate swap Real x Dollar		12,624
Exchange rate swap Dollar x Euro		9,282		(40,172)
Interest rate swap CDI x IPCA		(2,314)		43,143		(13,466)
Exchange rate swap CDI x Dollar		(134,185)		18,893		(2,314)		(40,172)
		(114,593)		21,864		(15,780)		(40,172)

 

27.

SEGMENT INFORMATION

 

Results by segment

 

For the purpose of preparing and presenting the information by business segment, Management decided to maintain the proportional consolidation of the jointly controlled entities as historically presented. For purposes of reconciliation of the consolidated result, the amounts recorded by these companies are not included in the “Corporate expenses/elimination” column.

 

																03/31/2024
P&L		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Net revenues
Domestic market		3,739,942		427,891		84,170		671,889		103,953		1,079,229		(1,139,841)		4,967,234
Foreign market		1,644,307		2,395,500										705,951		4,745,758
Cost of sales and services (note 24)		(5,175,397)		(1,916,131)		(66,695)		(367,598)		(83,859)		(800,029)		909,903		(7,499,808)
Gross profit		208,852		907,260		17,474		304,291		20,094		279,200		476,013		2,213,184
General and administrative expenses (note 24)		(323,005)		(82,424)		(2,905)		(59,196)		(14,615)		(177,793)		(745,479)		(1,405,417)
Other operating (income) expenses, net (note 25)		(160,432)		(58,803)		1,106		37,757		5,973		(50,939)		(70,653)		(295,991)
Equity in results of affiliated companies (note 9)														78,695		78,695
Operating result before Financial Income and Taxes		(274,584)		766,033		15,675		282,852		11,452		50,468		(261,424)		590,471
Sales by geographic area
Asia				2,134,631										705,951		2,840,583
North America		424,006														424,006
Latin America		7,300														7,300
Europe		1,213,001		171,057												1,384,058
Others				89,812												89,812
Foreign market		1,644,307		2,395,500										705,951		4,745,758
Domestic market		3,739,942		427,891		84,170		671,889		103,953		1,079,229		(1,139,841)		4,967,234
Total		5,384,249		2,823,391		84,170		671,889		103,953		1,079,229		(433,890)		9,712,992
																03/31/2023
P&L		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Net revenues
Domestic market		3,945,649		282,277		69,903		519,007		139,437		1,119,131		(846,688)		5,228,716
Foreign market		1,831,211		3,859,163										399,600		6,089,974
Cost of sales and services (note 23)		(5,021,041)		(2,246,834)		(59,478)		(339,692)		(123,518)		(959,623)		676,710		(8,073,476)
Gross profit		755,819		1,894,606		10,425		179,315		15,919		159,508		229,622		3,245,214
General and administrative expenses (note 23)		(313,076)		(126,359)		(2,015)		(42,819)		(12,629)		(96,274)		(427,222)		(1,020,394)
Other operating (income) expenses, net (note 25)		(627,475)		(636,454)		3,498		10,568		4,019		(38,263)		(381,701)		(1,665,808)
Equity in results of affiliated companies (note 9)														21,509		21,509
Operating result before Financial Income and Taxes		(184,732)		1,131,793		11,908		147,064		7,309		24,971		(557,792)		580,521
Sales by geographic area
Asia				3,769,149										399,600		4,168,749
North America		402,491														402,491
Latin America		46,759														46,759
Europe		1,381,961		90,014												1,471,975
Foreign market		1,831,211		3,859,163										399,600		6,089,974
Domestic market		3,945,649		282,277		69,903		519,007		139,437		1,119,131		(846,688)		5,228,716
Total		5,776,860		4,141,440		69,903		519,007		139,437		1,119,131		(447,088)		11,318,690

 

 

28.

ADDITIONAL INFORMATION TO CASH FLOWS

 

The following table provides additional information about transactions related to the statement of cash flows:

 

			Consolidated				Parent Company
	03/31/2024		03/31/2023		03/31/2024		03/31/2023
Income tax and social contribution paid	243,224		349,970		1,865
Addition to PP&E with interest capitalization (notes 10 and 26)	37,680		44,198		15,104		17,505
Remeasurement and addition – Right of use (note 10 i)	100,900		51,841		82		3,907
Addition to PP&E without adding cash	15,967		9,993
Capitalization in associate with no cash effect	118,000				118,000
	515,771		456,002		135,051		21,412

 

29.

STATEMENT OF COMPREHENSIVE INCOME

 

 

 

 

30.

SUBSEQUENT EVENTS

 

15th Issuance of Debentures

 

COMPANHIA SIDERÚRGICA NACIONAL ("Company") hereby announces that the Board of Directors has approved its 15th issuance of simple, non-convertible debentures, of the unsecured type, in up to two series, in the total amount of R$ 800,000,000.00 (eight hundred million reais). The Issuance will be subject to a public offering, under the automatic registration of the Resolution of the Brazilian Securities and Exchange Commission ("CVM") No. 160 and will meet the requirements of article 2 of Law No. 12,431, with the transaction is expected to be settled on May 8, 2024.

 

The First Series Debentures will have a maturity of ten (10) years and the Second Series Debentures will have a term of 15 (fifteen) years. The net proceeds raised by the Company through the Debentures will be used exclusively for future payment and/or reimbursement of expenses, expenses and/or debts related to the implementation of the Infrastructure investment project in the logistics and transportation sector presented by Transnordestina Logística S.A.

 

Signing of an exclusivity agreement for the acquisition of shares of InterCement Participações S.A.

 

COMPANHIA SIDERÚRGICA NACIONAL ("Company") signed on May 1, 2024 an agreement providing for exclusivity in the possible in the possible acquisition of shares representing 100% of the share capital of InterCement Participações S.A., and consequently of its subsidiaries, until of its subsidiaries, until July 12, 2024; after an official offer has been made, which is currently being evaluated by the respective sellers, within the scope of the agreement. evaluation by the respective sellers, in the context of a competitive process that is still underway, and its provisions confidential provisions describe a series of conditions precedent for defining the terms and conditions of any transaction and its potential implementation, which are customary in operations of a similar nature, including, expressly, prior approval of the Administrative Council for Economic Defense - CADE, should binding documents be signed.

 

To date, no binding documents have been signed with any counterparty that generate an obligation or commitment to carry out the potential transaction.

 

Payment of interim dividends based on shareholder position as of May 14, 2024

 

COMPANHIA SIDERÚRGICA NACIONAL ("Company"), through its Board of Directors, approved, at a meeting held on May 9, 2024, the distribution to shareholders of interim dividends to the profit reserve account, in the amount of R$950,000,000.00

(nine hundred and fifty million reais), corresponding to R$0.716389666 per share of the Company's share capital in circulation on this date. The dividends will be paid until May 29, 2024, and will be calculated and credited based on the Shareholders' positions on May 14, 2024.

  

 

 

Independent auditor's report on review the individual and consolidated interim financial information.

 

To the Shareholders, Directors and Managers of

Companhia Siderúrgica Nacional

Sao Paulo-SP

 

Introduction

 

We have reviewed the individual and consolidated interim financial information of Companhia Siderúrgica Nacional ("Company"), contained in the Quarterly Information Form - ITR for the quarter ended March 31, 2024, which comprise the balance sheet as of March 31, 2024 and the related statements of income, comprehensive income, for three eriod then ended and changes in shareholder’s equity and cash flows for the tree-month period then ended, including a summary of significant accounting policies and notes.

 

The Company's management is responsible for preparing and presenting the individual and consolidated interim financial information, in accordance with technical pronouncement NBC TG 21 - Interim Financial Statements and with the international accounting standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities Commission, applicable to the preparation of the Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

 

We conducted our review in accordance with Brazilian and international standards for reviewing interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Entity Auditor and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. The scope of a review is significantly less than that of an audit conducted in accordance with auditing standards and, as a result, did not enable us to obtain assurance that we have taken knowledge of all significant matters that could be identified in an audit. Therefore, we do not express an audit opinion.

 

Conclusion on the individual and consolidated interim financial information

 

Based on our review, we are not aware of any fact which leads us to believe that the individual and consolidated interim financial information included in the aforementioned quarterly information was not prepared, in all material respects, in accordance with NBC TG 21 and IAS 34, applicable to the preparation of the Quarterly Information - ITR, and presented in accordance with the rules issued by the Brazilian Securities and Exchange Commission.

 

Other matters

 

Statement of Value Added

 

The aforementioned quarterly information includes the individual and consolidated Statements of Value Added (DVA), referring to the tree month period ended March 31, 2024, prepared under the responsibility of the Company's management and presented as supplementary information for IAS purposes 34. These statements were submitted to review procedures performed in conjunction with the review of the Company's quarterly information - ITR -, in order to conclude whether they are reconciled with the interim financial information and accounting records, as applicable, and if their form and content are in accordance with the criteria defined in NBC TG 09 - "Demonstration of Added Value". Based on our review, we are not aware of any facts that lead us to believe that these statements of value added were not prepared, in all material respects, in accordance with the criteria defined in this standard and in a manner consistent with the interim financial information, individual and consolidated, taken together.

 

Barueri, May 29, 2024.

 

 

Mazars Auditores Independentes - Sociedade Simples Ltda.

CRC 2 SP023701/O-8

 

 

 

 

Danhiel Augusto Reis

CRC 1SP254522/O-0

 

Opinions and Statements / Officers Statement on the Financial Statement

 

 

As Executive Officers of Companhia Siderúrgica Nacional, we declare pursuant to Article 27, paragraph 1º, item VI, and Article 31, paragraph 1º, item II of CVM Instruction 80, of March 29, 2022, that we reviewed, discussed and agreed with the Company’s Financial Statements for the quarter ended March 31,2024.

 

 

 

 

São Paulo, May 09, 2024.

 

 

 

 

Benjamin Steinbruch

CEO

 

 

 

Antonio Marco Campos Rabello

Executive Officer – CFO and Investors Relations

 

 

 

David Moise Salama

Executive Officer

 

 

 

Luis Fernando Barbosa Martinez

Executive Officer

 

 

 

Stephan Heinz Josef Victor Weber

Executive Officer

 

 

 

Alexandre de Campos Lyra

Executive Officer

 

 

 

 

Opinions and Statements / Officers Statement on Auditor’s Report

 

As Executive Officers of Companhia Siderúrgica Nacional, we declare pursuant to Article 27, paragraph 1º, item V and Article 31, paragraph 1º, item II of CVM Instruction 80, of March 29,2022, that we reviewed, discussed and agreed with the opinion expressed on the Independent Auditors’ Report related to the Company’s Financial Statements for the quarter ended March 31,2024.

 

 

 

 

São Paulo, May 09, 2024.

 

 

 

 

Benjamin Steinbruch

CEO

 

 

 

Antonio Marco Campos Rabello

Executive Officer – CFO and Investors Relations

 

 

 

David Moise Salama

Executive Officer

 

 

 

Luis Fernando Barbosa Martinez

Executive Officer

 

 

 

Stephan Heinz Josef Victor Weber

Executive Officer

 

 

 

Alexandre de Campos Lyra

Executive Officer

 

 

 

 

 

 

 

 

 

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

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